Analyzing the Financial Performance and Investment Attractiveness of Startups Supported by Incubation Centers

Abstract

The startup and small business sector even goes as far as to being the main problem fixers of the economy, worldwide. Although startups can often benefit from the motivation and vision of the entrepreneurs, there are still some significant difficulties, such as insufficient funds, lack of essential business skills, and limited access to professional networks, all of which might lead to startup failures. Incubation centers are created to walk with startups at various stages, that is, give startups financial, technical, and mentoring support more so in the early stages of a business. The research looks into the financial efficiency and investment appeal of enterprises created through the incubation centers with a special spotlight on those university-based incubators in India. By combining the methods of research, in which financial analysis numbers are involved as well as qualitative interviews, the impact of incubation on startups' finances is reviewed, along with looking closely at investor attitude. We determine the most important financial ratios, such as profitability, solvency, and liquidity either of these are indicators for the financial resilience of a startup. Moreover, funding metrics, including series and investor type, which give insight into investor type selection for startups are researched too. Insights reported based on the filling up of the existing knowledge gap which relates to incubation centers' ability to increase financial yields and come in with investments. Such a study is significant since it depends on two crucial perspectives: first, incubator management, and second, investors.  It also shows a view that can be carefully observed by managers of incubators, potential investors, policymakers, and entrepreneurs.