This study investigates how technology level, competitive capacity, and business model innovation, along with the venture business confirmation program, interplay to shape the financial outcomes and growth trajectories of startups. By integrating both internal capabilities and external support mechanisms, this research provides a more comprehensive understanding of the factors influencing venture success.
Using data from the 2022 Survey of Korea Venture Firms, we analyzed a sample of 3,000 startups. Employing Partial Least Squares Structural Equation Modeling (PLS-SEM), this study evaluates the impact of internal capabilities and innovations on both immediate financial performance and long-term growth.
Our findings reveal a complex relationship in which the technology level significantly boosts long-term growth but paradoxically dampens short-term financial performance. Competitive capacity emerges as a strong contributor to both growth and financial metrics, underscoring the importance of agility and responsiveness. Strategic competitive focus positively influences long-term growth but does not show a significant effect on financial performance. Additionally, while business model innovation drives substantial growth, its immediate financial impact remains negligible, highlighting the long-term nature of its benefits. Finally, the venture business confirmation program positively moderates the relationship between competitive capacity and financial performance, amplifying its effect.
The findings offer actionable insights for venture managers, policymakers, and investors. Venture managers should balance technology investments with financial sustainability, using phased adoption strategies and external funding opportunities. Policymakers should design comprehensive venture support programs, combining financial aid, regulatory flexibility, and capacity-building initiatives to foster long-term sustainability. Investors should consider long-term growth potential over short-term financial performance, prioritizing startups with strong technological capabilities and competitive capacity. Understanding how venture business confirmation programs impact financial outcomes can help stakeholders refine strategic decisions, ensuring a holistic approach to fostering innovation-driven and financially sustainable ventures in evolving market conditions.
This research contributes to the entrepreneurship literature by challenging traditional strategic assumptions and providing empirical evidence on the unique effects of technology level, competitive capacity, and business model innovation within the startup landscape.
