This study investigates the impact of Venture Capital (VC) strategies on enterprise innovation using data from companies listed in China's Growth Enterprise Market (GEM) between 2009 and 2017. By employing Poisson regression analysis, the study reveals that VC investments significantly boost innovation performance, but the timing of investments is crucial. Specifically, late-stage investments are found to be more effective in promoting innovation compared to early-stage investments, and the number of investment rounds positively correlates with enhanced innovation performance. However, the relationship between multiple rounds of investment and innovation performance becomes more complex as late-stage investments appear to negatively moderate this effect, weakening the positive relationship between the number of investment rounds and innovation.,The study suggests that early-stage VC investments provide critical support to startups by reducing information asymmetry, offering the resources and mentorship that startups need to innovate at early stages. Early investments help shape the strategic direction of the company and can significantly reduce the risks associated with new product development or business models. In contrast, late-stage investments, often driven by the desire for quick returns, may cause investors to prioritize short-term goals rather than focusing on fostering sustained innovation. This shift in focus can undermine the startup's long-term growth potential and reduce its ability to innovate continuously.,The study highlights the importance of multi-round investments, which generally enhance innovation by improving monitoring, reducing risks, and allowing investors to provide ongoing support and strategic advice. However, it also underscores the importance of timing in these investments, with late-stage multi-round investments potentially leading to a focus on short-term goals at the expense of long-term innovation. The findings suggest that VC strategies should strike a balance between early and late-stage investments and investment rounds to maximize innovation in startups.,For investors, these insights emphasize the importance of carefully considering the timing of their investments, ensuring that they provide the necessary support at critical stages of startup development. For policymakers, understanding these dynamics can guide the design of policies that encourage optimal VC practices and support the creation of ecosystems that foster sustained innovation. Overall, the study provides valuable guidance for both investors and policymakers in crafting strategies that enhance enterprise innovation, ultimately contributing to long-term growth and technological advancement in the startup ecosystem.,

This study is particularly relevant because it addresses a critical issue that both investors and entrepreneurs face: how to structure venture capital investments in a way that maximizes innovation and supports sustainable growth in startups. The findings underscore the nuanced role that investment timing plays in the innovation trajectory of a startup. For investors, this insight is essential as it highlights the potential impact of early-stage investments, which tend to foster more sustained innovation, compared to the often short-term focus of late-stage investments driven by the desire for quick returns. Understanding this dynamic allows VCs to make more informed decisions about the timing and number of funding rounds to undertake, ensuring that they are not only helping startups grow but also fostering an environment that encourages long-term innovation.,For entrepreneurs, the study demonstrates how crucial it is to secure early-stage VC that can provide both capital and strategic guidance to tackle the challenges of developing and bringing innovative products to market. Early-stage investment not only helps reduce information asymmetry but also sets the foundation for future rounds of funding. It gives founders the confidence to focus on innovation rather than just meeting short-term financial targets. Additionally, the study suggests that while late-stage funding can be valuable for scaling, it may limit a startup's ability to remain innovative if it becomes too focused on immediate financial outcomes, rather than the long-term vision of the company.,The study also has significant implications for policymakers, as it offers insights into how governments can create supportive ecosystems for VC-backed startups. By encouraging the balance of early and late-stage investments and crafting policies that facilitate multi-round funding, policymakers can help foster innovation while ensuring that startups have the long-term capital needed to thrive. Moreover, the study points to the importance of providing the right type of support at different stages of a startup’s lifecycle, which can lead to a more resilient entrepreneurial ecosystem.,In conclusion, the study’s relevance lies in its ability to help investors, entrepreneurs, and policymakers navigate the complexities of venture capital. By understanding the timing and structure of investments, all stakeholders can optimize innovation outcomes in the startup ecosystem. It highlights the need for a balanced approach to funding, where early-stage investments are used to drive long-term innovation, and late-stage investments are used to scale, ensuring that startups are positioned for sustainable growth and continuous innovation in a competitive market.,