Enter the Shark Tank: The Impact of Business Models on Early Stage Financing

Investments are the necessary fuel for startup development. However, newventures face difficulties in obtaining financial investments. The investors aim to invest in startups with high success chances and quick return on investment. The business model (BM) of a startup was proven to be a determinant of its success. However, there is a lack of research on the influence of the BM on the amount of received seed funding. This study analyzes the BMs of 72 startups and the amount of received seed investment. We applied Pearson's product-moment correlation tests to calculate the correlation between these variables. Our research shows a correlation between the BM and the amount of received seed investment. We identify the patterns Two-Sided Market, Layer Player, and Freemium to have a significant positive effect on the investment sum. This research guides entrepreneurs in BM design and contributes to the discussion of success factors for startup success.