When selecting projects to fund, most investment firms have little to rely on besides their gut. But according to one Silicon Valley VC who goes by the pseudonym Remmy Oxley, investors can use a more reliable, data-based method to evaluate potential ventures with start-up companies. And you’ll be surprised at some of the odd data points Oxley’s firm uses.
Oxley’s system is partly inspired by popular algorithms like those featured in the movie Moneyball. These systems changed the shape of professional baseball by bringing statistics and big data into scouting. “Now we’re doing it, too,” Oxley says. Here are the four components to Oxley’s “secret algorithm” for investors who are deciding which companies to invest in:
We look at (and score) what you read. Be it off websites, apps, PDFs, magazines or books. So, if you’re reading something like Technology Ventures and tweeting bits of wisdom from a helpful entrepreneur’s guide, Oxley’s firm is going to notice and your chances for funding will jump. Conversely, your score will plummet if you’re reading about fantasy football and tweeting about the latest celebrity gossip.
Age of cell phone number and time of first daily phone call. Oxley uses these stats to determine a number of things about an entrepreneur: his or her relative stability, how old he or she is, and other important info. “At the end of the day,” writes Oxley, “we’re looking for entrepreneurs who are young, stable, middle class, and who have the support of family and friends.” And the age of the cellphone number tells all. Also revealing, he says, is an early morning start to phone activity. If the first phone call doesn’t appear until 11:00 am or noon, it may indicate a less than driven start-up exec.
How Othman Laraki are they? In other words, how close are they to the ideal entrepreneur? Sold anything big to Twitter? Degree from Stanford, MIT, or both? Street smarts to boot? Oxley looks for people “who question status quo, tip-toe the fine line, but still firmly understand rules and existing hierarchies.”
Stanford University founder team formula. Our algorithm does not say ‘Just Stanford,’” Oxley writes. But his VC firm also acknowledges that in every fund’s portfolio, the most successful companies have two or three founders from Stanford. To Oxley, start-ups that have “two or three founders from a good school” and at least one from a less typical school are most eligible for funding.
Posted January 2nd, 2013 under Tech Transfer