Factors Influencing Venture Capital Success and Risk: A Systematic Review

This systematic review, conducted following PRISMA guidelines, synthesizes findings from 60 peer-reviewed studies published between 2010 and 2025 to investigate the key factors influencing success and risk in venture capital (VC) investments. The identified factors are categorized into four main groups: startup-related, external, investor-related, and institutional. Success in VC investments is primarily associated with a competent management team, investor expertise, innovative business strategies, and robust market positioning. Conversely, risks are heightened by stringent regulatory frameworks, market volatility, economic uncertainties, and institutional weaknesses, particularly in emerging economies such as Iran, where structural challenges persist. The review underscores several critical themes. First, the quality of the startup team is pivotal, driving operational excellence and strategic execution. Second, innovation serves as a dual-edged sword, presenting both opportunities for growth and risks due to market unpredictability. Third, contextual factors, such as government policies, regulatory environments, and cultural norms, significantly shape VC outcomes. The synthesis offers tailored insights for diverse VC contexts, including traditional, corporate, and sustainability-focused investments, while highlighting gaps in the literature, such as the underrepresentation of certain regions, industries, and emerging markets in current research. Recommendations are provided for investors, entrepreneurs, and policymakers to enhance strategic decision-making, improve risk management, and foster supportive ecosystems. The review contributes a structured theoretical framework grounded in agency theory, resource-based view, and signaling theory, providing a nuanced understanding of how these factors interact across global VC ecosystems. Although the protocol was not registered in a public registry like PROSPERO, it adhered to a pre-defined protocol aligned with PRISMA guidelines to ensure transparency and minimize bias in study selection and synthesis.