Economics at your fingertips  

Measuring Founding Strategy

Jorge Guzman and Aishen Li

No 7cvge, SocArXiv from Center for Open Science

Abstract: We propose an approach to measure strategy using text-based machine learning. The key insight is that distance in the statements made by companies can be partially indicative of their strategic positioning with respect to each other. We formalize this insight by proposing a new measure of strategic positioning---the strategy score---and defining the assumptions and conditions under which we can estimate it empirically. We then implement this approach to score the strategic positioning of a large sample of startups in Crunchbase in relation to contemporaneous public companies. Startups with a higher founding strategy score have higher equity outcomes, reside in locations with more venture capital, and receive a higher amount of financing in seed financing events. One implication of this result is that founding strategic positioning is important for startup performance.

Date: 2019-11-22
New Economics Papers: this item is included in nep-big and nep-cmp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.31219/

Access Statistics for this paper

More papers in SocArXiv from Center for Open Science
Bibliographic data for series maintained by OSF ().

Page updated 2020-01-27
Handle: RePEc:osf:socarx:7cvge