Using Big Data to Identify Entrepreneurs Before They Found

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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