Lean Startup Methodology: A Venture Capitalist’s Perspective
Author: Albert-Jan de Croes
University of Twente P.O. Box 217, 7500AE Enschede
The Netherlands
ABSTRACT,
Recent macro-economic developments have led experts to argue that nowadays Lean Startup Methodology (LSM) has lost its value. This research focusses on how Dutch early stage venture capitalists value the method as a means to getting a startup ready for them to invest in. Derived from literature, it identifies five categories of investment criteria that are used to explain the investment decision. 11 semi-structured interviews were conducted with these venture capitalists to collect data about the possible relationship between these categories and LSM. These data were analyzed using a grounded theory approach to find out how LSM contributes to the willingness to invest.
Findings suggest that when given positive product and market characteristics, an early stage venture capitalist might be more likely to invest when these are developed by using LSM. However, it is found that the right use of LSM is perceived to be determined by the personality of the entrepreneur. When used wrong, over-experimentation might occur, which might ultimately decrease the willingness to invest.
Graduation Committee members:
Dr. R. Harms & Ir. E. J. Sempel
Keywords
Lean Startup Methodology, venture capital, investment criteria, early stage, business development, entrepreneurship
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