• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.18 no.1
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• pp.13-29
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• 2023

Overcoming the death valley, a period in which resources are depleted and profitability declines or stagnates in the entrepreneurial process, is an essential procedure for success. In this study, we examined how the strategic orientation(technology, customer, competitor orientations) and absorptive capacity(potential, realized capacities) of startups affect the possibility of startups to overcome the challenges of death valley, and also empirically analyzed whether support of open innovation and venture capital has a moderating influence to the overcoming of death valley. The result of this study shows that customer orientation and realized absorptive capacity have a positive influence on overcoming the death valley. In addition, we found that the support of open innovation and venture capital has a moderating effect only in the technology orientation among the three types of strategic orientations. The result of this research emphasizes (1) the need for startups to take a more customer-oriented approach to overcome the death valley. The customer-oriented behavior and strategies of startups are vital for their longterm survival and success if we consider the fact that most of the companies investigated in this study were technology-based startups and only customer orientation showed significant results in overcoming the death valley. The research outcome also shows that (2) implementing innovation in a more open way and securing venture capital funding can make it easier for startups to overcome the death valley. This study has academic significance in that it empirically analyzed the relationship of key factors influencing the overcoming of death valley in a situation where the majority of existing research remains at the conceptual level of discussion or methodology of case study. Furthermore, this research also provides practical implications for the establishment and implementation of effective strategies to confront the challenges of death valley for startups, government and related organizations.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.20 no.3
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• pp.366-376
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• 2019

Youth unemployment reached a record high in 2017, and business revitalization is emerging as a means of overcoming this situation. The number of venture companies and amounts of new venture investments are increasing year on year, and the government has upgraded Small and Medium Business Administration to the Ministry of SMEs and Startups. However, the success rate of startups is relatively poor. Over the past three years only 39.1% of Korean startups survived and 90% of companies failed in the Valley of Death phase. Survival this phase is critical for early startups, and thus, the amount and timing of investments are critical. Current models for establishing business startups do not effectively attract investments because they lack practical, corporate evaluation variables. In this paper, we develop a mixed process that incorporates the factors and business models focused on by venture capital investors. In addition, we compared our Death Valley Venture (DVV) process with current methods and provide an example of its application.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.14 no.6
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• pp.59-76
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• 2019

Most technology-based entrepreneurship(TBE) go through an process of decline or disappear without overcoming the valley of death(VoD). The purpose of this study is to identify the growth dimension of TBE and to test the influence of firms activities on firms growth over time. This study identified the two-dimensional growth dimension divided by size and profit through exploratory factor analysis(EFA) of a number of growth indicators. Then, we defined the discrete state of growth firm in four states, divided by size and profit, and five states, including the closure of business. Multi-nomial logit model is used to predict the effect of TBE activities on a discrete state of growth firm(size×profit, closure of business) based on multiple independent variables. The independent variables are based on five representative firms activities: employment, marketing, R&D, financial activities, and general management activities. The growth stage of TBE over time has been categorized into three stages: early stage, middle stage, and late stage of business, taking into account the main periods during which the survival rate of startups sharply decreases. The analytical data of this study was based on the secondary data of the start-up supporting companies of government and public institutions. The subjects of analysis were TBE within 10 years. As a result of the empirical analysis, the employment and marketing activities of TBE show that early and mid-term activities had an effect on the state of firms growth. However, if there is a difference, employment activities have both positive and negative effects, while marketing activities have only a positive effect on size and profit growth. And besides, R&D activities, financial activities, and general management activities throughout the entire process of firms growth were found to be firms activities that have both positive and negative effects on firms growth. In addition, the age of the founder, the firms' industry, and the geographic location of the firms, which are general characteristics of the company, were found to have a distinctive effect on the growth status of the firms according to the growth stage.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.18 no.2
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• pp.95-111
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• 2023

Korea has achieved a high startup rate by promoting government-led startup policies for national economic and industrial development. However, as high as the startup rate is, the closure rate of startup companies can be judged to be insufficient for the qualitative growth of the domestic startup ecosystem. This study aims to investigate how to improve the survival rate of startups by overcoming the valley of death from a location environment perspective. It analyzes the effects of technology orientation and market orientation of start-ups on management performance and the moderating effects of economic, accessibility, and network factors that constitute the location environment. To achieve the research objectives, the empirical analysis was conducted on start-up companies that received corporate support projects from innovation intermediary organizations. The results show that R&D capability of technology orientation has a significant effect on management performance, and market information generation and market information response of market orientation have a significant effect on management performance. As for the moderating effect, accessibility, a sub-factor of the location environment, has a positive moderating effect on the relationship between technological innovation and managerial performance, and the location environment (economy, accessibility, and network) has a positive moderating effect on the relationship between market information generation and managerial performance. This study compared and analyzed previous studies on the success and failure of start-ups and identified common factors. In addition, this study provides policy implications for the sustainable growth of startups through empirical analysis and interview with stakeholders. For future research, it is necessary to compare and analyze start-ups in metropolitan areas and non-metropolitan areas. In addition, it is necessary to study startups that have moved out of the region and into the metropolitan area to find ways to develop the regional startup ecosystem.