[Today’s Startup] June 2024 Issue: Investment

f analyzing startup data. We aim to support business ventures that feel daunting and planning that feels blurry. Rather than sharing inimitable success myths, we deliver actionable insights that help you right now. Cultivate a habit of exploring 'Today's Startup' through a new lens every month.

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Main Content:Today’s Startup June Issue: Investment

It is a challenging time for startups. Excessive contraction in investment due to economic recession and rising interest rates is cited as the primary cause. Unlike the past, when funding was active based solely on future growth potential, startups must now demonstrate tangible results alongside that potential. Despite these hardships, entrepreneurs are striving to secure funds by strengthening internal operations and discovering new monetization models.

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While securing capital through investment is undoubtedly a vital engine for achieving a startup's mission and vision, funding itself is not synonymous with success. We have seen countless cases where startups failed even after raising significant capital. However, investment holds a deeper significance beyond just securing funds. There are various criteria for investment decisions, differing by fund objectives and investment stages, with each investor possessing their own philosophy and expertise. Nevertheless, when asked why they execute an investment, a common answer emerges: What truly matters is the likelihood that the entrepreneur can solve the problem at hand, the feasibility of the business model, and the capability of the team to turn that possibility into reality.

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We were curious about what makes funded startups different—what problems they aim to solve and what commonalities they share. To find out, we began by examining the entrepreneurs produced by Underdogs over the past 8 years.

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Startup teams that have grown with Underdogs record job creation rates more than twice the average reported by the Ministry of SMEs and Startups¹). They boast an average investment of 410 million KRW and an investment attraction rate of 43%. We asked Underdogs coaches to recommend 10 impressive alumni teams that successfully secured investment and analyzed them using the 'underdogsLABS' methodology. While the sample size is small for general generalization and the approach is not purely academic, this report identifies the characteristics of pre-seed and early-stage startup teams that have succeeded in attracting investment, proven by numerical performance from a developmental and educational perspective.

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