Theoretical foundations of startups investing mechanism

Babitskyi Roman
Postgraduate Student, Department of Economics of Enterprise and Organization of Entrepreneurship, Odesa National Economic University, Ukraine, e-mail: roman@babitskyi.com, ORCID ID: https://orcid.org/0000-0003-0201-6500

Cite this article:

Babitskyi, R. (2024). Theoretical foundations of startups investing mechanism [Teoretychni osnovy mekhanizmu investuvannia startapiv], Socio-economic research bulletin, Vìsnik socìal’no-ekonomìčnih doslìdžen’ (ISSN 2313-4569), Odessa National Economic University, Odessa, No. 3-4 (90-91), pp. 147-158.

Abstract

The article considers the theoretical foundations and proposes the authorʼs vision of the management mechanism for investing in startups. The subject of the study is theoretical provisions and existing approaches to determining the essence of the investment mechanism of startups. The purpose of the article is to formulate the theoretical content and essential features of the concepts «investment in a startup», «investing in a startup», «mechanism of investing in startups», and consideration of approaches to the formation of investment mechanisms. The article shows the place of investments in capital reproduction models of startups. The importance of investments for the self-growth of the intellectual capital of startups has been proven. The existing approaches to defining the essence of «investment» and «investing» are systematized. Based on the results of a critical analysis and using the authorʼs research on the concept of «startup», a definition of «startup investment» is proposed as a set of relationships related to the expenditure of all types of resources that were invested in a business based on innovation, with the aim of expanded reproduction of intellectual capital. Modern views on the theoretical essence of investment mechanisms are analyzed and their main components are singled out. Static (structural) and dynamic approaches to forming investment mechanisms have been distinguished. The dynamic approach involves considering the mechanism as a process, in contrast to the static approach, which is focused on a systemic approach. Taking into account the authorʼs studies of the essence of mechanisms in the economy, the conclusion was obtained that the concept of «startup investment mechanism» can be understood as a system of management actions, methods, and forms of influence of stakeholders on the set of relationships, which are associated with the expenditure of all types of resources invested in innovative business.

Keywords

investment in startups; investing in startups; startup investment mechanism; intellectual capital; innovative entrepreneurship; capital reproduction.

JEL classification: M210; O320; DOI:https://doi.org/10.33987/vsed.3-4(90-91).2024.147-158

UD classification: 330.332:658:005.5

This work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

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