Subject The article investigates specifics of startups requiring a unique approach, a different from the existing ones for traditional companies. Objectives The purpose of this study is to develop a mechanism for financial and economic analysis of startups at the early growth stage, in order to make a decision about their financing. Methods The article, based on the critical analysis of economic literature (scientific research, reports of consulting companies and industry experts) identifies the prerequisites for creating a mechanism and existing approaches to analyzing the financial and economic condition of companies, such as financial analysis, CPV analysis, and analysis of debt service ratios. For each approach, we performed a bibliographic analysis of works of Russian and foreign scientists and methods they developed. Results We developed a mechanism for financial and economic analysis of startups, considering their specific features. The paper presents a graphical structure of a typical balance sheet, reveals methods of analysis, calculates the recommended limits for coefficients, and identifies areas for improving the traditional mechanisms. Conclusions The financial and economic analysis of startups at the early growth stage should be carried out, using the proposed mechanism. This will enable financial intermediaries to identify creditworthy borrowers and assess their development prospects with the help of financial and economic tools; founders of startups to improve the efficiency of business management; investors to reduce the risk of investment non-repayment, which will increase investment in the innovative sector of the economy and contribute to its development.
Keywords: startup, financial and economic analysis, crowdfunding platform, financial intermediary, innovative company
References:
Salamzadeh A., Kawamorita H. Startup Companies: Life Cycle and Challenges. URL: Link
Valančiené L., Jegelevičiūté S. Crowdfunding for Creating Value: Stakeholder Approach. Procedia – Social and Behavioral Sciences, 2014, vol. 156, pp. 599–604. URL: Link
Kraus S., Richter C., Brem A. et al. Strategies for Reward-Based Crowdfunding Campaigns. Journal of Innovation & Knowledge, 2016, vol. 1, iss. 1, pp. 13–23. URL: Link
Kerr W.R., Nanda R. Financing Innovation. Harvard Business School Working Paper, 2014, no. 15-034. URL: Link
Alińska A., Czepirska I. The development of payment services as an example of disintermediation in the financial system. E-Finanse, 2016, vol. 12, iss. 2, pp. 60–73. URL: Link
Ulyukaev S.S. [Fundamental disintermediate turning point»: A casual occurrence or an objective tendency?]. Finansovaya analitika: problemy i resheniya = Financial Analysis: Science and Experience, 2010, no. 5, pp. 66–71. URL: Link (In Russ.)
Fiyaksel' E.A., Solokhin A.A., Sokolov I.N. [Equity crowdfunding. Review of research and development deliverables]. Innovatsii = Innovations, 2017, no. 7, pp. 42–54. URL: Link (In Russ.)
Nikulina O.V., Yakhshibekyan A.A. [Improving the mechanism of financing of innovative projects in the form of the creation and development of start-ups]. Innovatsii = Innovations, 2016, no. 10, pp. 93–104. URL: Link (In Russ.)
Pashtova L.G., Baev G.O. [Current issues of start-ups (small manufacturing enterprises) in the economy of Russia]. Finansovaya analitika: problemy i resheniya = Financial Analysis: Science and Experience, 2015, no. 37, pp. 26–40. URL: Link (In Russ.)
Chursina Yu.A., Lenkova E.A. [The small-scale business' financial analysis. Problems, solutions]. Vestnik evraziiskoi nauki = Eurasian Scientific Journal, 2014, no. 5, pp. 1–18. URL: Link (In Russ.)
Lyubushin N.P., Ionova E.S. [Effectiveness of organizational forms of enterprises]. Ekonomicheskii analiz: teoriya i praktika = Economic Analysis: Theory and Practice, 2013, no. 32, pp. 2–13. URL: Link (In Russ.)
Borisov A.N. [Methods of small business financing]. Rossiiskoe predprinimatel'stvo = Russian Journal of Entrepreneurship, 2007, no. 2, pp. 40–44. URL: Link (In Russ.)
Zhilkina A.N. [A graphic method in the enterprise finance analysis as a new instrument for increasing quality of enterprise finance management]. Vestnik Rossiiskogo universiteta druzhby narodov. Seriya: Ekonomika = Bulletin of Peoples’ Friendship University of Russia. Series Economics, 2004, no. 1, pp. 91–98. URL: Link (In Russ.)
Zhilkina A.N. [Finance, financial management, financial analysis of a key item of stability]. Vestnik universiteta = University Bulletin, 2014, no. 21, pp. 155–157. URL: Link (In Russ.)
Lyubushin N.P., Babicheva N.E., Galushkina A.I., Kozlova L.V. [Analysis of methods and models of the evaluation of the financial stability of the organizations]. Ekonomicheskii analiz: teoriya i praktika = Economic Analysis: Theory and Practice, 2010, no. 1, pp. 3–11. URL: Link (In Russ.)
Kumakova A.M. [Break-even analysis]. Aktual'nye voprosy sovremennoi ekonomiki = Topical Issues of Modern Economy, 2015, no. 4, pp. 28–31. URL: Link (In Russ.)
Napso M.M., Kravtsova S.I. [Break-even analysis in the management accounting system]. Ekonomika i upravlenie: analiz tendentsii i perspektiv razvitiya, 2016, no. 26, pp. 167–171. (In Russ.)
Shapovalova A.A. [Break-even analysis as a basis for making management decisions]. Science Time, 2016, no. 4, pp. 921–929. (In Russ.)
Kondratova S.V., Umrikhina M.V. [CVP analysis as a tool for effective company management in the new economy]. Ekonomicheskii analiz: teoriya i praktika = Economic Analysis: Theory and Practice, 2014, no. 34, pp. 28–35. URL: Link (In Russ.)
Damodaran A. Investment Valuation: Tools and Techniques for Determining the Value of any Asset. 3rd edition. USA, Wiley, 2012, 992 p.
Trachenko M.B. [Data modeling in management accounting and budgeting systems]. Mezhdunarodnyi bukhgalterskii uchet = International Accounting, 2017, vol. 20, no. 20, pp. 1183–1201. (In Russ.) URL: Link
Vakhrushina M.A., Pashkova L.V. Byudzhetirovanie v sisteme upravlencheskogo ucheta malogo biznesa: metodika i organizatsiya postanovki: monografiya [Budgeting in the system of management accounting of small business: Methods and organization: a monograph]. Moscow, Vuzovskii uchebnik Publ., 2015, 11 p.
