The role of Taiwan's venture capital industry in the development of fintech startups : resource provider, risk manager or value creator?

Purpose: This study investigates the multifaceted role of Taiwan's venture capital (VC) industry in the development of financial technology (Fintech) startups. Specifically, it examines the VC industry's contributions as resource providers, risk managers, and value creators throughout the various stages of a startup's lifecycle-from establishment to growth and eventual exit. Design/methodology/approach: A qualitative research methodology was adopted, employing semi-structured in-depth interviews with industry experts. This approach enabled a comprehensive exploration of how the VC industry supports Fintech startups during the stages of establishment, growth, and strategic exit, focusing on the provision of resources, risk management practices, and value creation activities. Findings: The research findings highlight that Taiwan's VC industry predominantly acts as a resource provider during the early stages of Fintech startups, offering critical support such as funding, industry connections, and strategic guidance. As startups transition to the growth stage, VCs take on the role of risk managers, mitigating potential risks through portfolio diversification, risk control measures, and active oversight. In the mature stage, the role of VCs evolves into that of value creators, where they contribute to startups' strategic goals and facilitate value realization through carefully planned exits and additional operational support. Collectively, these roles underscore the VC industry's pivotal involvement in fostering the development and success of Fintech startups. Research limitations/implications: This study is limited by its reliance on qualitative data from expert interviews, which may not fully capture the breadth of VC practices across sectors or regions. Future research could include quantitative analyses or comparative studies to provide broader insights. Despite these limitations, the findings offer valuable perspectives on the strategic functions of VCs in supporting Fintech ecosystems. Originality/value: This study contributes to the limited body of literature on the role of venture capital in Fintech startup ecosystems, with a specific focus on Taiwan. By delineating the distinct roles of VCs across different stages of startup development, the research offers a novel framework for understanding how VCs drive innovation, mitigate risks, and enhance value creation. These insights are particularly relevant for policymakers, entrepreneurs, and investors aiming to optimize the impact of venture capital on the Fintech industry.