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The start-up's roadmap to private equity financing: substituting discounts with a premium in valuation for growth

Anastasia Giakoumelou (Department of Management, Ca’ Foscari University of Venice, Venice, Italy)
Antonio Salvi (Department of Management, University of Turin, Turin, Italy)
Olga Kvasova (School of Business and Management, University of Central Lancashire - Cyprus Campus, Larnaca, Cyprus)
Ioannis Rizomyliotis (University of West Attica, Athens, Greece)

International Journal of Entrepreneurial Behavior & Research

ISSN: 1355-2554

Article publication date: 26 May 2023




Access to financing is a key success factor for start-ups. High failure rates, long payback periodse and asymmetries lead to conservative pricing and valuation discounts. The authors examine financial marketing and contingent factors, as enablers of a “patent premium” by private equity (PE) investors targeting start-ups in their growth and expansion stages.


Drawing from the contingency, innovation and signaling theories, the authors collect patent records for Italian start-ups in which a higher than 30% stake was acquired by PE investors during the period 2014–2020. The authors apply a generalized linear model with a logit link and robust clustered error to test the key relationships and control for endogeneity with a Heckman two-stage selection model.


Findings indicate start-ups’ access to financing is significantly impacted by marketing constructs adopted in the operation. Innovation alone does not suffice to determine a valuation premium, unless contingent on the promotion of its product, the placement -investors targeted-of the equity, brand equity levers of previous ownership and marketing competence backing the deal.


The authors provide new insights in the marketing-finance interface, highlighting levers that reassure investors and enable monetizing innovation in start-ups that are still privately held. The authors bridge a gap in literature that has mainly focused on venture capital and innovation financing in the open market, as well as a significant gap regarding the marketing design of private equity placements.



Giakoumelou, A., Salvi, A., Kvasova, O. and Rizomyliotis, I. (2023), "The start-up's roadmap to private equity financing: substituting discounts with a premium in valuation for growth", International Journal of Entrepreneurial Behavior & Research, Vol. ahead-of-print No. ahead-of-print.



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