Valuation challenges and investor influence in sustainable health ventures

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Abstract

This study examines valuation challenges and investor influence in sustainable health startups, a sector characterised by regulatory complexity, high capital requirements, and increasing integration of environmental, social, and governance (ESG) factors. The research addresses the limitations of traditional valuation models in capturing early-stage success indicators and proposes a more nuanced approach. A mixed-methods design was employed, combining a systematic literature review with empirical cluster analysis using a dataset of 923 U.S.-based startups across 35 sectors. The analysis identified five distinct startup archetypes based on investor structure, funding levels, and exit outcomes. Startups with the most diverse investor base — engaging both angel and venture capital (VC) across multiple funding stages — exhibited the highest acquisition success rates (91.8 per cent). Sector-specific analysis revealed that health startups received above-average funding and achieved a 100 per cent acquisition rate, whereas medical startups displayed greater outcome variability. These findings highlight the need for multidimensional, sector-sensitive valuation frameworks that incorporate investor signalling, ESG orientation, and market timing. The findings of this study both support and build upon prior research on startup valuation and success factors. In line with Davila et al. (2003) and Lerner et al. (2018), the clustering analysis demonstrates that investor diversity — especially the combined involvement of angel and VC investors — substantially enhances the likelihood of acquisition. The results are also consistent with Somaya and You (2024) and Adner et al. (2016), underscoring scalability as a central determinant of valuation, particularly in technology-intensive sectors such as software, mobile, and biotechnology, which secured the highest levels of funding. The study offers new insights into the entrepreneurial finance literature and provides practical guidance for investors, founders, and policymakers aiming to scale sustainable innovation in the health sector.

Keywords: Cluster Analysis, ESG Integration, Investor Structure, Startup Valuation, Sustainable Health Ventures

Authors’ individual contribution: Conceptualization — D.V., I.M., P.T., and W.M.; Methodology — D.V., I.M., and A.K.O.; Software — D.V. and I.M.; Investigation — D.V., I.M., and P.T.; Resources — D.V., I.M., and W.M.; Writing — D.V., I.M., P.T., W.M., and A.K.O.; Visualization — D.V., I.M., P.T., and W.M.; Supervision — D.V.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G24, L26, O35

Received: 01.08.2025
Revised: 15.12.2025; 04.03.2026
Accepted: 10.03.2026
Published online: 12.03.2026

How to cite this paper: Vasiliauskaitė, D., Mažylytė, I., Teresiūtė, P., Meng, W., & Kaab Omeir, A. (2026). Valuation challenges and investor influence in sustainable health ventures. Corporate Governance and Sustainability Review, 10(2), 78–90. https://doi.org/10.22495/cgsrv10i2p7