On the internet, there is no dearth of experts predicting factors determining startup success. Add to it the research done by MIT Sloan School of Management.
MIT Sloan’s entrepreneurship and strategy professors Christian Catalini and Scott Stern, in their working paper on venture capital investment and startup founders’ choices, have identified among other things, predictors that signal a startup’s growth and success.
Catalini and Stern from MIT and Jorge Guzman from Columbia Business School analyzed business registration data from 34 states from 1995-2004 for the working paper titled, ‘Passive Versus Active Growth: Evidence from Founder Choices and Venture Capital Investment.’ They found that companies that register in Delaware and obtain intellectual property such as a patent or trademark are far more likely to see equity growth, which leads to more venture capital investment.
The paper suggested that firms that check both those boxes are “278 times more likely” to get venture capital, and achieve more ‘proactive’ growth.
Read Complete Article