Should B2B start-ups invest in marketing?

Ofer Mintz, Gary L. Lilien

Research output: Contribution to journalArticlepeer-review


Start-up firms play a major role in the economy, with B2B start-ups often developing new technologies and offerings to business customers that incumbent firms do not provide. However, little is known about the cost-effectiveness of start-up firms' investments in marketing. We integrate insights from managerial interviews with signaling theory to posit how conducting systematic marketing affects start-up firm valuation, and how the combination of the firm's primary customer-type (B2B versus B2C) and development stage (early versus late) moderates that effect. Our empirical analysis reveals that marketing investments affect firm valuation positively for some start-ups and negatively for others depending on the noted moderators. In particular, we find that investments in systematic marketing by early-stage B2B start-ups increase firm valuation, yet more than half of early-stage B2B start-up firms choose not to invest in systematic marketing, apparently believing such investments will not pay off.

Original languageEnglish (US)
Pages (from-to)220-237
Number of pages18
JournalIndustrial Marketing Management
StatePublished - Feb 2024

All Science Journal Classification (ASJC) codes

  • Marketing

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