Abstract—The purpose of this study is to develop a conceptual framework towards building a model for venture capitalists to evaluate investments in technology based firms, considering them from their growth stage. Fast growth entrepreneurs need this model to determine the right investors to approach, since not all specialize in funding early stage high risk companies. Previous studies revealed that major problems TBF owners face is identifying financial institutions to approach for funding, and what criteria that financial institutions used to evaluate the technologies? And also, several capital are lying idle with retired and successful individuals who also encounter difficulty of identifying the right companies to fund, because they do not possess the requisite skills to evaluate businesses based on their proposals. Past research have failed to represent the growth stages of the TBFs in a model such as this, which makes it easier for interest parties to adopt when evaluating thousands of business proposals, though they all mentioned the various growth stages except the Death stage mentioned in this study. Literature review is from secondary sources such as journals, textbooks, e-journals, websites, newspaper articles, online materials, personal discussions with colleagues. The findings of this study are important because it contributes more insights to the academic research of financing technology based firms, and call for further research on presenting the growth stages using graphical approach. Furthermore, the result of this research will be useful to link theory to practice.
Index Terms—Technology Based Firms; Growth Cycle; Venture Capital Finance; Business Angels.
K. Ismail is a Senior Lecturer with the Faculty of Management Universiti Teknologi Malaysia and Deputy Director of Commercialization, Innovation and Commercialization Centre (ICC) UTM, 81310 Skudai, Johor, Malaysia
A. S. Aslan is a Senior Lecturer and Head of Department Undergraduate Studies, Department of Management Universiti Teknologi Malaysia, 81310 Skudai, Johor, Malaysia (firstname.lastname@example.org)
A. M. Ajagbe was formerly a regional sales manager and currently a doctorate degree student with Universiti Teknologi Malaysia, 81310 Skudai, Johor, Malaysia. (email@example.com).
Cite: Kamariah Ismail, Aslan Amat Senin, and Ajagbe Akintunde Musibau, "A Conceptualised Approach towards Building a Growth Model for Venture Capitalists Financing of TBFs," International Journal of Innovation, Management and Technology vol. 2, no. 4, pp. 315-320, 2011.