Thursday, December 27, 2012
Using SNA to assess the potential success of a angel or venture capital investment
Venture capitalists and business angels often form "alliances" or syndicates to invest in start-up companies.
The goal of the research:
Analyse how a pool of investors is interconnected (social connections and collaborative connections) and identify patterns between the density of the network, closeness of investments (same industry / ...), and success of investments, and does a network of investors with a high density affect companies creations in a specific area?
Furthermore, is a well connected network of a company's investors correlated with successful growth or exits?
This research could also provide a tool to measure one's own distance from an attractive "clique" of investors and thus finding an appropriate way to more easily access capital for startup founders.
Attributes needed:
-Is the person a Business angel or VC?
-# of successful exits the investor made
-# of deals the investor made
-Name of companies invested in
-Target industries
-Region.
For the collaborative connections between investors, ie those that have coinvested in a same company, various databases exist for venture capital companies and individuals that disclose names of the target companies, amounts invested, exits.
For angel investors, there are a lot of country-wide networks that disclose name of the members, but investments are not disclosed. It is therefore needed to survey these investors with a questionnaire.
For the social connections between investors, a rough research could be done over internet social networks such as linkedin and twitter to assess if they are 1.connected (linkedin connections / follower-following) 2.one way or two ways (has "tweeted" but didn't receive a reply ...) which can also be a proxy for the strength of the connection.
It would however be a first step for a more detailed analysis which can only be pursued with questionnaires and extensive research.
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1 comment:
Dirk, This is a good start. There are studies of social connections between investors; it would be interesting to examine the qualitative aspects of these connections, as you suggest
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