VCTA: Valuation and track record top reasons for funding agreement collapse

VCTA study

Business owners of early stage companies say funding agreements are most likely to fall through because of a failure to agree on company valuation and a lack of a proven track record, according to research from the Venture Capital Trust Association.

VCTA surveyed 240 "senior decision makers" in charge of businesses less than seven years old and employing up to 250 people. Around 43% said funding agreements fall through because of disagreement on company valuation, with 42% saying a lack of proven track record also being a factor and 37% saying it was down to the lack of a fully developed business model. Where will the funds flow in 2023? The research also found that despite 92% of respondents requiring equity finance over the coming two years, 44% lack information on how to access it. Will Fraser-Allen, chair of the VCTA, s...