Effect of Access to Venture Capital on Innovation in Startups in Congo

Abstract

Purpose: The aim of the study was to assess the effect of access to venture capital on innovation in startups in Congo.

Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries.

Findings: The study found that startups with easier access to venture capital tend to invest more in research and development (R&D) activities, leading to increased innovation outputs such as new products, services, and processes. This access to funding also allows startups to attract top talent, acquire necessary resources, and expand their market presence, all of which contribute to fostering innovation. Moreover, venture capital-backed startups often exhibit higher levels of risk-taking and experimentation, which are crucial elements in driving innovation and technological advancements. Overall, the findings suggest that access to venture capital plays a pivotal role in enhancing innovation within startups and driving economic growth.

Implications to Theory, Practice and Policy: Resource-based view theory, agency theory and social network theory may be used to anchor future studies on assessing the effect of access to venture capital on innovation in startups in Congo. In practice, startups should be encouraged to proactively seek diverse investor networks beyond traditional venture capitalists. On the policy front, governments and regulatory bodies can play a pivotal role in fostering an environment conducive to venture capital investment in startups.