• Abstract

    This systematic literature review explores the multifaceted qualitative factors influencing the valuation of Information Technology/Information Systems (IT/IS) startups. These startups, characterized by rapid development cycles and disruptive technologies, face unique challenges and opportunities within volatile markets. Key qualitative factors identified include Technology Readiness Levels (TRLs), Intellectual Property (IP), founder and management team characteristics, strategic partnerships, funding, geographical location, and business strategy. The review highlights the critical role these non-financial metrics play in assessing startup potential and valuation. Limitations arise from the scope of available evidence and reliance on secondary sources. The findings lead to the development of a nuanced evaluation framework that can assist startup founders in strengthening their qualitative factors, thereby achieving fair and robust valuations. This framework is crucial for guiding strategic decision-making, enhancing investor confidence, and supporting sustainable growth and competitive advantage in the evolving IT/IS landscape.

  • References

    1. Berre, M. (2022). Which factors matter most? can startup valuation be micro-targeted? SSRN Electronic Journal. https://doi.org/10.2139/ssrn.4286915
    2. Bliemel, M., Flores, R., De Klerk, S., & Miles, M. P. (2019). Accelerators as start-up infrastructure for entrepreneurial clusters. Entrepreneurship & Regional Development, 31(1-2), 133-149. https://doi.org/10.1080/08985626.2018.1537152
    3. Brown, R., & Mason, C. (2017). Looking inside the spiky bits: a critical review and conceptualisation of entrepreneurial ecosystems. Small business economics, 49, 11-30. https://doi.org/10.1007/s11187-017-9865-7
    4. Ciccullo, F., Fabbri, M., Abdelkafi, N., & Pero, M. (2022). Exploring the potential of business models for sustainability and big data for food waste reduction. Journal of Cleaner Production, 340, 130673. https://doi.org/10.1016/j.jclepro.2022.130673
    5. Cole, R. A., & Sokolyk, T. (2018). Debt financing, survival, and growth of start-up firms. Journal of Corporate Finance, 50, 609-625. https://doi.org/10.1016/j.jcorpfin.2017.10.013
    6. Couto, M. H., Oliva, F. L., Del Giudice, M., Kotabe, M., Chin, T., & Kelle, P. (2021). Life cycle analysis of Brazilian startups: Characteristics, intellectual capital, agents, and associated risks. Journal of Intellectual Capital, 23(6), 1348–1378. https://doi.org/10.1108/jic-01-2021-0005
    7. Cueto, B., Suárez, P., & Mayor, M. (2021). Effects of human capital and regional context on entrepreneurial survival. The Annals of Regional Science, 66, 331-357. 10.1007/S00168-020-01023-0
    8. Cumming, D., & Johan, S. (2017). The problems with and promise of entrepreneurial finance. Strategic Entrepreneurship Journal, 11(3), 357-370. https://doi.org/10.1002/sej.1265
    9. Cumpston, M., Li, T., Page, M. J., Chandler, J., Welch, V. A., Higgins, J. P., & Thomas, J. (2019). Updated guidance for trusted systematic reviews: a new edition of the Cochrane Handbook for Systematic Reviews of Interventions. The Cochrane database of systematic reviews, 10(10),142. https://doi.org/10.1002/14651858.ED000142
    10. Deias, A., & Magrini, A. (2023). The impact of equity funding dynamics on venture success: an empirical analysis based on Crunchbase data. Economies, 11(1), 19. 10.3390/economies11010019
    11. Freytag, R. (2019). On a growth track with startups: how established companies can pursue innovation. Strategy & Leadership, 47(4), 26-33. 10.1108/SL-05-2019-0070
    12. Gerhardt, V., Santos, J. D., Rubin, E., Neuenfeldt, A., & Mairesse Siluk, J. C. (2021). Stakeholders perception to characterize the start-ups success. Journal of technology management & innovation, 16(1), 38-50. http://dx.doi.org/10.4067/S0718-27242021000100038
    13. Giedraitis, A., & Kasnauskė, J. (2015). Regional model of establishment of startups. Management Theory and Studies for Rural Business and Infrastructure Development, 37(4), 490-500.
    14. Gifford, E., Buenstorf, G., Ljungberg, D., McKelvey, M., & Zaring, O. (2021). Variety in founder experience and the performance of knowledge-intensive innovative firms. Journal of Evolutionary Economics, 31, 677-713. 10.1007/S00191-020-00692-6
    15. Gonnella, E., & Talarico, L. (2023). The reputation factor in the valuation of startups. International Business Research, 16(7), 56–74. https://doi.org/10.5539/ibr.v16n7p56
    16. Gough, D., Oliver, S., & Thomas, J. (2012). An introduction to systematic reviews. Sage Publications.
    17. Grilo, A., Águeda, A., Zutshi, A., & Nodehi, T. (2017, June). Relationship between investors and European startup ecosystems builders. In 2017 International Conference on Engineering, Technology, and Innovation (ICE/ITMC) (pp. 538-550). IEEE. 10.1109/ICE.2017.8279932.
    18. Gupta, S. (2018). Driving digital strategy: A guide to reimagining your business. Harvard Business Press.
    19. Gwarda-Gruszczyńska, E. (2023). Intellectual property protection in startups. Kwartalnik Nauk o Przedsiębiorstwie, 67(1), 39–50. https://doi.org/10.33119/knop.2023.67.1.3
    20. Harris, J. L. (2021). Bridging the gap between ‘fin’ and ‘tech’: The role of accelerator networks in emerging fintech entrepreneurial ecosystems. Geoforum, 122, 174–182. https://doi.org/10.1016/j.geoforum.2021.04.010
    21. Hasenauer, R., Gschöpf, A., & Weber, C. (2016, September). Technology readiness, market readiness and the triple bottom line: An empirical analysis of innovating startups in an incubator. In 2016 Portland International Conference on Management of Engineering and Technology (PICMET) (pp. 1387-1428). IEEE. 10.1109/PICMET.2016.7806523
    22. Héder, M. (2017). From NASA to EU: the evolution of the TRL scale in Public Sector Innovation. The Innovation Journal, 22(2), 1-23.
    23. Hellmann, T., & Thiele, V. (2019). Fostering entrepreneurship: Promoting founding or funding?. Management Science, 65(6), 2502-2521. https://doi.org/10.1287/mnsc.2018.3074
    24. Higgins, J. P. T., Thomas, J., Chandler, J., et al. (2020). Cochrane Handbook for Systematic Reviews of Interventions (2nd ed.). Wiley.
    25. Hong, Q. N., Pluye, P., Fàbregues, S., Bartlett, G., Boardman, F., Cargo, M., ... & Vedel, I. (2019). Improving the content validity of the mixed methods appraisal tool: a modified e-Delphi study. Journal of clinical epidemiology, 111, 49-59.https://doi.org/10.1016/j.jclinepi.2019.03.008
    26. Hoskins, J. D., & Griffin, A. (2023). Market selection and product positioning decisions’ implications for short-and long-term performance: evidence from the US music industry. Journal of Product & Brand Management, 32(4), 582-599. https://doi.org/10.1108/JPBM-01-2022-3835
    27. Joshi, M. K. (2018). Crowdfunding For Startups in India. Aweshkar Research Journal, 24(1).
    28. Knight, A. P., Greer, L. L., & De Jong, B. (2020). Start-up teams: A multidimensional conceptualization, Integrative Review of past research, and future research agenda. Academy of Management Annals, 14(1), 231–266. https://doi.org/10.5465/annals.2018.0061
    29. Kumar, N. R., Ravindran, K., Rangegowda, R., & Putri, S. M. B. (2024). Agile strategies for brand identity and market positioning in business expansion. In Advances in logistics, operations, and management science book series (pp. 73–86). IGI Global. https://doi.org/10.4018/979-8-3693-6274-7.ch005
    30. Leitão, J., Pereira, D., & Gonçalves, Â. (2022). Business incubators, accelerators, and performance of technology-based ventures: A systematic literature review. Journal of Open Innovation: Technology, Market, and Complexity, 8(1), 46. https://doi.org/10.3390/joitmc8010046
    31. Lubinski, C. (2022). IP management in the start-up lifecycle. Intellectual Property Strategies for Start-Ups, 191–214. https://doi.org/10.4337/9781802204025.00015
    32. Manning, C. G. (2023). Technology readiness levels. NASA. https://www.nasa.gov/directorates/somd/space-communications-navigation-program/technology-readiness-levels/
    33. Masili, G., & Curina, I. (2018). Global start-ups and born global spin-offs: a multiple case study. International Journal of Economic Behavior (IJEB), 8(1), 61-80. https://doi.org/10.14276/2285-0430.1928
    34. Moher, D., Liberati, A., Tetzlaff, J., Altman, D. G., Mulrow, C. D., Gøtzsche, P. C., Ioannidis, J. P. A., Clarke, M., Devereaux, P. J., Kleijnen, J., & Oxman, A. D. (2009). The PRISMA statement for reporting systematic reviews and meta-analyses of studies that evaluate healthcare interventions: Explanation and elaboration. PLOS Medicine, 6(7), e1000100. https://doi.org/10.1371/journal.pmed.1000100
    35. Montanaro, B., Cavallo, A., Giudici, G., & Ghezzi, A. (2021). Determinants of the exit value in European venture capital-backed technology startups. Competitiveness Review: An International Business Journal, 32(7), 62–84. https://doi.org/10.1108/cr-03-2021-0032
    36. Ngoc, P. H. (2022). Financial Resources for innovative startups – studies in emerging economies and trends for studies in Vietnam. International Journal of Management & Entrepreneurship Research, 4(11), 458–468. https://doi.org/10.51594/ijmer.v4i11.404
    37. Nigam, K., & Gokhru, A. (2023). A study on financial opportunities and challenges facing startups during covid-19. International Journal of Management, Public Policy and Research, 2(SpecialIssue), 7-13. https://doi.org/10.55829/ijmpr.v2iSpecialIssue.129
    38. Noyes, J., Booth, A., Moore, G., Flemming, K., Tunçalp, Ö., & Shakibazadeh, E. (2019). Synthesising quantitative and qualitative evidence to inform guidelines on complex interventions: clarifying the purposes, designs and outlining some methods. BMJ global health, 4(Suppl 1), e000893. https://doi.org/10.1136/bmjgh-2018-000893
    39. Olechowski, A. L., Eppinger, S. D., Joglekar, N., & Tomaschek, K. (2020). Technology readiness levels: Shortcomings and improvement opportunities. Systems Engineering, 23(4), 395-408. https://doi.org/10.1002/sys.21533
    40. Ridzwan, R., Muhammad, N. M., & Rahman, A. A. (2017). Issues and challenges among young entrepreneurs in Malaysia. IOSR Journal of Business and Management, 19(03), 80–84. https://doi.org/10.9790/487x-1903028084
    41. Sandelowski, M., Voils, C. I., & Barroso, J. (2006). Defining and Designing Mixed Research Synthesis Studies. Research in the schools: a nationally refereed journal sponsored by the Mid-South Educational Research Association and the University of Alabama, 13(1), 29.
    42. Schriek, U. (2022). Basics of Intellectual Property Rights with a focus on start-ups. Intellectual Property Strategies for Start-Ups, 1–32. https://doi.org/10.4337/9781802204025.00008
    43. Siddiqui, D., & Ahmad, N. (2022). Study of support and services provided by business incubators in entrepreneurship. AMC Indian Journal of Entrepreneurship, 5(2), 19-29. 10.17010/amcije/2022/v5i2/171467
    44. Sivicka, Ju. O. (2018). Features of valuation of startup companies. Economic Scope, 0(132), 163–174. https://doi.org/10.30838/p.es.2224.240418.163.60
    45. Spiridonova, E. V., & Trofimova, C. V. (2019, January). The sources of innovation financing: a conceptual model for adopting managerial decisions. International Scientific Conference" Far East Con"(ISCFEC 2018) (pp. 286-290). Atlantis Press. 10.2991/ISCFEC-18.2019.65
    46. Subburayan, B. (2023). Strategies for raising capital for your startup. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.4397494
    47. Sudiana, K., Sule, E. T., Soemaryani, I., & Yunizar, Y. (2020). Discovering support needed for startups in their early stages using on Penta Helix Framework. Business: Theory and Practice, 21(1), 212–221. https://doi.org/10.3846/btp.2020.10930
    48. Thirasak, V. (2019). Building an effective startup team. In International Conference on Advances in Business and Law (ICABL) (Vol. 3, No. 1, pp. 18-27).
    49. Vihervuori, V. (2017). Assessing startup teams and team dynamics from an investor's perspective [Master’s thesis, Aalto University]. https://urn.fi/URN:NBN:fi:aalto-201712188076
    50. Visconti, R. M. (2020). The valuation of technological startups. In The valuation of digital intangibles (pp. 95–130). Palgrave Macmillan. https://doi.org/10.1007/978-3-030-36918-7_6
    51. Wessendorf, C. P., Kegelmann, J., & Terzidis, O. (2019). Determinants of early-stage technology venture valuation by business angels and venture capitalists. International Journal of Entrepreneurial Venturing, 11(5), 489-520. 10.1504/IJEV.2019.102259
    52. Yiğit, G., Özen, A., Çetinkaya, F., Ünal, E. U., İşcan, H. Z., Birincioğlu, C. L., & Sarıtaş, A. (2020). Early and late-term follow-up results of patients diagnosed with aortic aneurysm or aortic dissection with aortic regurgitation undergoing aortic valve repair or valve-sparing aortic surgery. Brazilian Journal of Cardiovascular Surgery, 36, 192-200. 10.21470/1678-9741-2020-0133
    53. Yoonmi, S., Kang, H. B., & Park, J. (2021). A study on the effect of technology readiness level and commercialization activities on the success of technology commercialization: Focusing on public technology. Journal of the Korea Academia Industrial Cooperation Society, 22(6), 197–206. https://doi.org/10.5762/KAIS.2021.22.6.197
    54. Young, V., Zile, I., Bejawn, K., & Carter, P. (2023). SA14 assessing risk of bias in systematic literature reviews: Which tools are most commonly used? Value in Health, 26(6). https://doi.org/10.1016/j.jval.2023.03.2230
    55. Zaheer, H., Breyer, Y., Dumay, J., & Enjeti, M. (2019). Straight from the horse's mouth: Founders' perspectives on achieving ‘traction’in digital start-ups. Computers in Human Behavior, 95, 262-274.
    56. Zane, L. J. (2023). Intellectual capital and the acquisition of human capital by technology-based new ventures. Journal of Intellectual Capital, 24(3), 780-798.

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Copyright (c) 2025 The Authors

How to cite

Maheshwari, V., Kumar, S., Yew, B. C., Wah, O. B., Yee, A. S. V., Razak, S. E. A., & Ramachandran, J. (2025). Qualitative factors affecting IT/IS startups valuation. Multidisciplinary Reviews, 8(12), 2025386. https://doi.org/10.31893/multirev.2025386
  • Article viewed - 1184
  • PDF downloaded - 371