UPDATE: This article is out of date, since Prediction is not supported anymore. We have made progress in our research, that led to a new product, LAB.
With LAB we are now able to measure more accurately how efficient a network of a startup is and how close is to the core of a given ecosystem. To find out more about LAB, please read HERE.
Big data, not just a buzzword.
Can the impressive amount of data people generate every day on the internet be used as a criteria to assess investments in startups? This amount of data, when properly analysed and processed, consent a new data-driven approach which lays the stress on the growing importance of networking. As a matter of fact, more and more studies highlight the importance of external social connections in determining the company success.
That will help the investors in their choices and the entrepreneurs in their product development and networking activities.
A further demonstration of this theory can be seen in Alex Pentland’s work, Social Physics. In his book, the MIT professor, named to Forbes 2012 “World’s Seven Most Important Data Scientists” List, defines Social Physics as a quantitative science that sets out on one hand the mathematical connections between information and ideas, on the other human behaviour.
The author points out that this science enables to foresee the behavior of small groups, company departments and even entire cities by scanning the data they produce every day.
Most of the times, the investors, while looking for new talents, rely just on his/her instinct, his/her experience or, at best, some common acquaintance. Nevertheless, the investor or the business angel cannot be completely sure if the start-upper has a social network adequate to sustaining, carrying out and ultimately sell the business idea.
Startup Network has deeply analyzed historical data on AngelList, one of the world’s most trusted site in the startup community. Our research team has singled out a direct connection between the startup network efficiency (a measure of the quality of the founders social network) and the probability for the company to get funded.
And it is precisely on Angel List database that Startup Network Prediction goes by.
On this page it can be found an up-to-date list of the most recent startups on the AngelList platform that have > 90% of chances to attract investments according to their network efficiency ratio.
The Prediction feature allows to spot talents with a strong connection in the startup panorama before everyone else, preventing them to go unnoticed at a first scan. It is not just a matter of time saving. It is a completely new approach which allows to collect data otherwise impossible to obtain and, as a result, a completely new approach to evaluate a startup: investors can now rely not just on their instincts but on dependable data.
This data-driven approach can be also used by start-uppers to their advantage during the phases of negotiation and the company equity value, as they are able to make a proper assessment of their own social network and contacts.
Use Prediction by Startup Network to find out which are the most promising startups or if your company has a promising network.