Design as a competitive advantage in start-up fundraising

This study examines how design can be employed to create a competitive advantage for start-ups in seeking external funding.

Access to funding is a crucial factor for start-ups when it comes to building, developing and growing their business. A better understanding of the criteria sought by investors or financiers can aid entrepreneurs in obtaining funding. The current literature on fundraising overlooks the role that design plays in start-ups’ fundraising activities.

A multiple case study analysis shows a number of ways that start-ups might benefit from a design-led approach to fundraising. The study is based on interviews with Danish institutional and private investors, designers, design institutions, governmental organizations and key decision makers in design-led start-ups.

The researchers identify the main opportunities and challenges for designled start-ups in the fundraising process and demonstrate how taking a design-led approach towards fundraising might confer a competitive advantage for start-ups that are looking to obtain external funding.

The study shows how this competitive advantage might be realized and proposes a model that explains how the fundraising process leading to the investment decision might be influenced by design. This newly proposed model was then tested in a small study of Australian-based entrepreneurs and intrapreneurs, looking for validation, similarities and anomalies between the Danish and Australian start-up cultures.