The Influence of Innovativeness in Attracting Venture Capital Investment Among Tech Smes in Nasarawa State, Nigeria

Abstract

The entrepreneurial landscape in Nigeria, particularly in Nasarawa State, is evolving, with tech small and medium enterprises (tech SMEs) recognized as pivotal to economic growth. This study aims to investigate the influence of innovativeness on attracting venture capital investment among tech SMEs within Nasarawa State. The objectives include assessing the relationship between innovativeness and investment amounts and evaluating how innovative practices affect the attractiveness of tech SMEs to venture capitalists. Utilizing a positivist approach, the research surveyed a population of 9,874 registered SME owners from the Nasarawa State Ministry of Commerce and Industries (2024). A sample of 384 was determined using Taro Yamane's formula. Data were collected through structured questionnaires and analyzed using regression analysis in SPSS. The findings revealed significant relationships, with all three null hypotheses rejected: (1) Innovativeness significantly affects venture capital investment decisions (r = 0.912, p < 0.01); (2) Higher levels of innovation correlate with increased investment amounts (r = 0.874, p < 0.01); (3) Innovative practices positively influence venture capitalists' investment strategies (r = 0.845, p < 0.01). The study concludes that fostering a culture of innovation among tech SMEs can enhance their attractiveness to venture capitalists, thus stimulating economic growth in Nasarawa State. Recommendations include developing tailored innovation frameworks and enhancing training for tech SME owners to improve their innovative capabilities.