ScaleX is proud of its research partnership with Audencia's 'Finance for Innovation' Chair, which has been in place since 2018, the year the Chair was created. This collaboration underlines our renewed commitment to further our knowledge of the complex dynamics within the finance and innovation sectors, particularly as they relate to startup valuations and macroeconomic factors.
Our collaboration with this chair brings together the expertise of leading academics and innovative industry leaders. We gain valuable insights into the complex relationship between economic cycles, deal conditions and startup valuations. This partnership enables us to pursue our mission of providing cutting-edge financial analysis to our investor and corporate clients.
As part of this dynamic, ScaleX COO and Head of Methodology Edouard Thibaut served as a member of the jury for Max Berre's thesis defence, “the valuation of startups”, under the supervision of Benjamin Le Pendeven and Peter Wirtz.
Together, Benjamin Le Pendeven, who holds the 'Finance for Innovation' chair at Audencia, and Max Berre have undertaken a study to understand the impact of macroeconomic factors and investor characteristics in determining startup valuations.
During the four-year research program, and with the help of ScaleX, they compiled a dataset comprising 1,089 observations involving 1,042 transactions on 675 European companies between 2000 and 2020. Their findings highlight that the business cycle, which represents continuous economic movements over a given period, is a key determinant of valuation. The impact can be seen at two levels: direct and indirect.
The authors confirm that the influence on startup valuations is primarily driven by business cycles. Although other macroeconomic market conditions, such as country risk premiums and venture capital investments, have an impact on pre-money startup valuations, they function primarily as transmission vehicles for the impact of business cycles, rather than as independent factors influencing valuations.
Access the full working paper online:
Business-cycles and Cash-on-Market:Pre-money Startup Valuation in the Macroeconomic Environment