Studying The Characteristics And Efficiency Of Venture-Capital Funded Startups

Sebastien Lubrano, Union College - Schenectady, NY


Every year more than 500,000 startups are created and less than 1,000 of those receive venture capital funding. Increasing the number of successful startups can lead to more jobs in the economy and improve innovation across industries. Previous research has attempted to determine characteristics of successful startups and has found that Human Capital, Structural Capital, and Social Capital have the most impact on the success of a startup. This thesis examines the quantitative characteristics of successful startups by calculating efficiency scores of startups using Data Envelopment Analysis (DEA). This thesis also uses the Boston Consulting Group Matrix as an additional tool of analysis to relate other characteristics of startups with their efficiency scores. Two Case Studies are also performed on one of the most efficient startups and one of the least efficient startups in the sample. The results of this thesis show that the most startups are relatively inefficient, however, the highest performing startups focus on human and structural capital rather than social capital. Entrepreneurs, investors, and others in the startup industry can learn from this thesis which variables impact startup efficiency and which industry impacts efficiency the most.


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