In the race to find the next great investment, some venture capital firms are using big data to find potential founders and innovators before they try their hand at founding a company:
Roy Bahat’s VC firm [Bloomberg Beta] teamed up with the data research firm Mattermark to conduct a study of 1.5 million professionals in New York and Silicon Valley. An algorithm evaluated work history, educational history — information publicly available online.
From that, Bahat says, you can deduce a lot: “For example, if somebody’s ever worked at a startup that’s backed by venture capitalist then they’re much more likely to start a startup in the future because that’s the world they’ve seen.”
Based on their findings, Bloomberg Beta reached out to 350 prospective entrepreneurs and invited them to a networking meeting. Bahat says that they had to reach out to some of them twice, because “several people thought it was a scam.”
Obviously, this approach can’t yet screen for the personality traits or vision that make a great founder; but it can help narrow the search field and get potential founders in touch with venture capitalists before they even start bootstrapping.
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