Abstract: Digital finance is a new product of the combination of internet information technology and traditional financial tools, which has a significant impact on the financing behavior and technological innovation of start-ups. Based on the 2012—2021 data of digital finance development index of Peking University and GEM-NEEQ listed companies, this paper empirically tested and discussed the influence mechanism of digital finance on innovation mode selection of start-ups. This empirical study finds that digital finance significantly promotes the radical innovation of start-ups and inhibits the incremental innovation; by promoting the financialization of start-ups, digital finance promotes radical innovation and decreases incremental innovation. Further considering the external environmental factors of start-ups, it is found that the high-tech intensity degree of the industry in which the start-ups are located strengthened the promotion effect of financialization on radical innovation, but had no significant effect on the relationship between financialization and incremental innovation; the uncertainty of macroeconomic policy weakened the promotion effect of financialization on radical innovation and the inhibition effect of financialization on incremental innovation. This paper not only enriches the research of the impact of digital finance on the innovation of start-ups, but also provides empirical evidence and practical enlightenment for start-ups to use digital finance to promote high-quality innovation.