adrientalbot / startups_funding_analysis

In this repository you will find the results of my analysis on the funding of startups to determine success and survivability given a Crunchbase dataset of 50,000 companies

Start-ups/Scale-ups' success and survivability analysis

As part of my Master's degree at Imperial, I conducted some research on the funding of startups given a Crunchbase data set detailing the financing of 50,000 startups/scaleups until 2013. I chose this topic because of my deep interest in venture capital and startups in general and I wanted to learn more about what are the most important factors that determine the success of certain companies (also other than funding) such sector, country etc.

Abstract

Background: Quantitative methods can help investors such as venture capital funds in discovering new investment opportunities and help start-ups to secure funding depending on the market and country they are operating in. Due to the extensive domain knowledge requirement and the lack of access to exhaustive information, a combination of business acumen and quantitative methods would allow to collect, process and analyze data with the aim to answer the following question: what factors allow companies to become successful? Or given the available data prior to 2014, which specific funding sources allowed companies to survive? Objective: This report did not provide an established data-approach to spot the next Facebook, but rather looked at overall trends that companies which succeeded or survived share and attempted to discover insights on the success and survivability of companies given funding data in various markets and countries by using a set of data-related and statistical tools. We also tried to predict whether a company will be acquired or not by using supervised machine learning models. Results: Access to funding, and especially venture funding, was crucial for companies to survive. However, the success rate of companies was less dependent on funding raised than survival rate, hence the importance of strategic planning, the market as well as the country the start-up is operating in to determine success. In the past six years, companies in the biotechnology sector were particularly attractive in the eyes of investors. This strong interest from investors could be illustrated with the 600% increase in funding for companies in this sector from 2014 to 2020.