YouNoodle Predicts the Future of Early-Stage Startups with New Valuation and Ratings Technology
Startup Predictor™ Forecasts Growth and Manages Risk for Early-Stage Companies
SAN FRANCISCO, Ca. — August 07, 2008 — YouNoodle, the online platform for the global entrepreneurial community, today introduced Startup Predictor™, the first technology that analyzes data on early-stage startups and generates a scientific prediction of the companies' future outcomes, as well as the first standardized score for pre-funded startups.
The first version of Startup Predictor has been made publicly-available and is a free Web-based service that allows entrepreneurs, investors and other startup supporters to enter information about early-stage companies through an online test. Users receive an estimate of the startup company's valuation in three years, as well as a "YouNoodle Score" — a number similar to a credit rating, based on a 1,000-point scale, that gauges the feasibility and promise of the company's future.
After taking the free online test, users will also be matched with other YouNoodle members determined by the YouNoodle search engine to be of value to that particular startup company — potential employees, advisors, journalists, service providers, business partners and more.
"This is the first time technology has been used to help manage risk and predict growth for early-stage companies," says Bob Goodson, CEO and co-founder of YouNoodle. "For more established companies, quantitative, systematic decision-making for investors is standard - using technology-driven credit rating services such as Moody's and Standard & Poor's. But until now, no similar system has existed for companies in their earliest stages."
Startup Predictor uses a sophisticated and patent-pending algorithm that evaluates a number of variables, including backgrounds of the founders and advisors, business concept and team dynamics. Users must input details about key team members or advisors, relationships between team members, current or future products, patentable technology, and any capital invested by the founding team.
To determine the information needed to generate an accurate and reliable score, YouNoodle's development team studied thousands of current and past startups, using both publicly available and proprietary data, to determine patterns of predictive factors for early-stage companies' success.
"We learned that a company's DNA — the fundamental things that can strongly influence its future success — is generally formed in the very first days that the company is in business," says Kirill Makharinsky, co-founder of YouNoodle, who led the development of the mathematical algorithm behind Startup Predictor. "Our technology analyzes data based on those early days — going back to the pure concept and the bones of the business built by the founders. Our research has proven that the patterns in the data we measure from those days can be surprisingly prophetic about how a company will perform in the future."
Calibrated specifically for companies that were founded recently and have not yet received capital investments in its first version, Startup Predictor is the first in a series of decision-making tools YouNoodle plans to introduce for the startup industry, including predictive tools for later-stage companies.
"Recent scientific findings in the field of social network analysis have allowed us to accurately measure and quantify the social network of a team and its individual team members," says Rebeca Hwang, a Ph.D. candidate from Stanford in Social Network Theory, and Director of Network Strategy and Development at YouNoodle. "The precise composition and position of the startup founding team within the social graph have both been shown to offer significant insights on the startup's potential for success."
After taking the Startup Predictor test, users can print an official certificate to prove the startup's predicted valuation and YouNoodle Score.
"As entrepreneurs seek seed and early-stage investments in their startup companies, we believe Startup Predictor's results and YouNoodle Score will become a core part of the pitch," says Goodson. "In 2007, VCs and angels invested more than $67 billion in cash in startups in the United States alone — decisions made subjectively, without any kind of standardization to the process. Our sophisticated technology will provide a baseline, based on powerful data, to change the way those decisions are made."
YouNoodle members can take the online Startup Predictor test at www.younoodle.com. YouNoodle site registration and the first version of Startup Predictor are both free.
About YouNoodle
YouNoodle develops innovative ways to bring together the information, people and technology that help startups succeed. The company provides an online networking platform for entrepreneurs, investors, journalists, service providers, technologists and others devoted to the startup ecosystem. Recognizing that some of the world's most groundbreaking startups came from university communities (where all of YouNoodle's founders began their careers), YouNoodle also serves as a platform for so far 50 of the world's top university entrepreneurship clubs and competitions, encompassing 40,000 members and 1,700 startups. Additionally, YouNoodle develops decision-making technology software and tools for the startup community. www.younoodle.com