Beefing IT Up for Your Investor? Engagement with Open Source Communities, Innovation, and Startup Funding: Evidence from GitHub

Annamaria Conti (), Christian Peukert () and Maria Roche ()
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Annamaria Conti: IE Business School, 28046 Madrid, Spain
Christian Peukert: Faculty of Business and Economics (HEC), University of Lausanne, Quartier Chamberonne, 1015 Lausanne, Switzerland
Maria Roche: Harvard Business School, Boston, Massachusetts 02163

Organization Science, 2025, vol. 36, issue 4, 1551-1573

Abstract: We study the engagement of nascent firms with open source communities and its implications for innovation and attracting funding. To do so, we link data on 160,065 U.S. startups from Crunchbase to their activities on the open source software development platform GitHub. In a matched sample of firms with and without GitHub activities, difference-in-differences models reveal a substantial increase in the likelihood of being funded after early stage startups engage with open source communities on GitHub. This relationship is weaker for firms that employ GitHub for internal development only. Startups developing novel technologies tend to benefit more from engaging with open source communities, unlike those in highly competitive environments. This heterogeneity highlights a potential trade-off between engaging with open source communities and appropriability. To provide insight regarding mechanisms, we classify startups’ technology use-cases on GitHub using machine learning and exploit data on product launches. Our results from these additional analyses support the notion that one important channel potentially driving our findings is the access to external knowledge for technology development provided by open source communities. Engaging with these communities may thereby aid startups in innovating and creating a (minimum) viable product.

Keywords: startups; knowledge; open source communities; GitHub; machine learning; venture capital; innovation (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ororsc:v:36:y:2025:i:4:p:1551-1573

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