The Effect of Investment on ICT Based Startups: the Case of Startups Located in Addis Ababa
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Date
2023-06
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Addis Ababa University
Abstract
This study examines the impact of investments on the success of ICT-based startup enterprises,
specifically focusing on the relationships between Startup Success, Investment Readiness, Type
and Source of Investment, and Timing of Investment. The purpose of this research is to provide
insights into the critical factors influencing the success of ICT startups and offer recommendations
for entrepreneurs, investors, and policymakers. A quantitative research methodology was
employed, collecting data from a diverse sample of ICT startup companies. Descriptive,
correlational, and regression techniques were utilized to analyze the data and derive conclusions.
The target population for this study includes ICT-based startup enterprises, and the sample size
consists of a representative selection of these companies. Data analysis revealed that both
Investment Readiness and Timing of Investment are statistically significant and positively related
to Startup Success. In contrast, the relative influence of Type and Source of Investment was found
to be comparatively smaller. These findings emphasize the importance of prioritizing investment
readiness and optimizing the timing of investment decisions for startup success. Stakeholders in
the startup ecosystem, including investors and policymakers, are encouraged to consider these
factors when evaluating potential investments in ICT-based firms. While Type and Source of
Investment remain essential, they should not be the sole determinants of a startup's success. This
study contributes valuable insights to the growing body of literature on the role of investment in
the development of ICT-based startup companies and offers practical recommendations for
startups, investors, and governments. Keywords: ICT startups, investment readiness, startup
success, timing of investment, type and source of investment