Snowballing signaling theory in startup valuation: a systematic review on investor behavior, market forces and growth dynamics
This systematic review integrates content analysis and bibliometric methods to explore how market forces, investor perceptions and theoretical frameworks influence startup valuation across different fundraising stages. Following PRISMA 2020 guidelines, the study analyzes 344 news articles and 970 ac...
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| Format: | Article |
| Language: | English |
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Taylor & Francis Group
2025-12-01
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| Series: | Cogent Business & Management |
| Subjects: | |
| Online Access: | https://www.tandfonline.com/doi/10.1080/23311975.2025.2530752 |
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| _version_ | 1850094498089009152 |
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| author | Muchamad Arif Zamani Ersa Tri Wahyuni Hamzah Ritchi Tettet Fitrijanti |
| author_facet | Muchamad Arif Zamani Ersa Tri Wahyuni Hamzah Ritchi Tettet Fitrijanti |
| author_sort | Muchamad Arif Zamani |
| collection | DOAJ |
| description | This systematic review integrates content analysis and bibliometric methods to explore how market forces, investor perceptions and theoretical frameworks influence startup valuation across different fundraising stages. Following PRISMA 2020 guidelines, the study analyzes 344 news articles and 970 academic publications to identify recurring themes such as innovation, growth, profitability and signaling behavior. The core contribution of this research is the formulation of the Snowballing Signaling Theory – a novel conceptual model that illustrates how valuation signals accumulate over time, reinforcing investor expectations and driving cyclical valuation dynamics. This model explains how valuations, like a snowball, grow through successive funding rounds and eventually align with financial fundamentals, especially at IPO and post-IPO stages. In addition, the study introduces the concept of reverse signaling, where investors actively shape startup behavior through funding decisions, media narratives and exit strategies. By combining qualitative and bibliometric insights, this study bridges academic theory with investment practices, providing a structured framework for understanding startup valuation beyond financial metrics. It emphasizes that each stage of a startup’s lifecycle demands a tailored valuation approach, accounting for evolving investor priorities and market contexts. The findings offer actionable insights for scholars, investors and policymakers navigating the increasingly complex startup financing ecosystem. |
| format | Article |
| id | doaj-art-e633d590db2944dc9331dced69bf0149 |
| institution | DOAJ |
| issn | 2331-1975 |
| language | English |
| publishDate | 2025-12-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Cogent Business & Management |
| spelling | doaj-art-e633d590db2944dc9331dced69bf01492025-08-20T02:41:39ZengTaylor & Francis GroupCogent Business & Management2331-19752025-12-0112110.1080/23311975.2025.2530752Snowballing signaling theory in startup valuation: a systematic review on investor behavior, market forces and growth dynamicsMuchamad Arif Zamani0Ersa Tri Wahyuni1Hamzah Ritchi2Tettet Fitrijanti3Department of Accounting, Faculty of Economics and Business, Universitas Padjadjaran, Bandung, IndonesiaDepartment of Accounting, Faculty of Economics and Business, Universitas Padjadjaran, Bandung, IndonesiaDepartment of Accounting, Faculty of Economics and Business, Universitas Padjadjaran, Bandung, IndonesiaDepartment of Accounting, Faculty of Economics and Business, Universitas Padjadjaran, Bandung, IndonesiaThis systematic review integrates content analysis and bibliometric methods to explore how market forces, investor perceptions and theoretical frameworks influence startup valuation across different fundraising stages. Following PRISMA 2020 guidelines, the study analyzes 344 news articles and 970 academic publications to identify recurring themes such as innovation, growth, profitability and signaling behavior. The core contribution of this research is the formulation of the Snowballing Signaling Theory – a novel conceptual model that illustrates how valuation signals accumulate over time, reinforcing investor expectations and driving cyclical valuation dynamics. This model explains how valuations, like a snowball, grow through successive funding rounds and eventually align with financial fundamentals, especially at IPO and post-IPO stages. In addition, the study introduces the concept of reverse signaling, where investors actively shape startup behavior through funding decisions, media narratives and exit strategies. By combining qualitative and bibliometric insights, this study bridges academic theory with investment practices, providing a structured framework for understanding startup valuation beyond financial metrics. It emphasizes that each stage of a startup’s lifecycle demands a tailored valuation approach, accounting for evolving investor priorities and market contexts. The findings offer actionable insights for scholars, investors and policymakers navigating the increasingly complex startup financing ecosystem.https://www.tandfonline.com/doi/10.1080/23311975.2025.2530752Startup valuationSignaling theoryFinancial behaviorInvestor biasesBibliometric analysisBusiness, Management and Accounting |
| spellingShingle | Muchamad Arif Zamani Ersa Tri Wahyuni Hamzah Ritchi Tettet Fitrijanti Snowballing signaling theory in startup valuation: a systematic review on investor behavior, market forces and growth dynamics Cogent Business & Management Startup valuation Signaling theory Financial behavior Investor biases Bibliometric analysis Business, Management and Accounting |
| title | Snowballing signaling theory in startup valuation: a systematic review on investor behavior, market forces and growth dynamics |
| title_full | Snowballing signaling theory in startup valuation: a systematic review on investor behavior, market forces and growth dynamics |
| title_fullStr | Snowballing signaling theory in startup valuation: a systematic review on investor behavior, market forces and growth dynamics |
| title_full_unstemmed | Snowballing signaling theory in startup valuation: a systematic review on investor behavior, market forces and growth dynamics |
| title_short | Snowballing signaling theory in startup valuation: a systematic review on investor behavior, market forces and growth dynamics |
| title_sort | snowballing signaling theory in startup valuation a systematic review on investor behavior market forces and growth dynamics |
| topic | Startup valuation Signaling theory Financial behavior Investor biases Bibliometric analysis Business, Management and Accounting |
| url | https://www.tandfonline.com/doi/10.1080/23311975.2025.2530752 |
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