CB Insights launches algorithm to score the quality of startup's founding and management team

CB Insights launches algorithm to score the quality of startup's founding and management team

Published: 02-09-2021 13:05:15 | By: Pie Kamau | hits: 168 | Tags:

CB Insights, which enables world's leading companies to make smarter technology decisions, announced Management Mosaic, the first-ever algorithm to demystify the quality of a startup's founding and management team.

With Management Mosaic, corporations and investors can quickly identify the most promising technology companies and accelerate their technology purchasing, investment or M&A decisions. 

The Management Mosaic algorithm uses a variety of signals about founders and management teams to derive its score. These include, but are not limited to:

  • Past employers
  • When they joined prior companies
  • The milestones those companies achieved while they worked there
  • Network quality based on other people they're likely to know
  • Educational institution
  • Educational attainment (degree, major)

 

Based on these signals, Management Mosaic assigns a score out of 1,000 (with 1,000 being the best) that measures the likelihood that the team will create a successful outcome, such as an IPO or acquisition. To train the model, CB Insights data scientists analyzed thousands of successful technology company outcomes and the teams behind them to determine the attributes of the most successful founders and teams. 

Management Mosaic is the latest addition to CB Insights' Mosaic Score, a National Science Foundation-backed model used to measure and predict the health and success potential of private tech companies. The remaining three pillars that make up Mosaic include Momentum, Market, and Money, each of which analyze different data and signals. Since 2015, the Mosaic has been used to predict the future unicorn companies (tech companies with valuations of $1B+), with a 74% hit rate. 

According to a Harvard Business Review report, 95% of VC firms said a company's management team is an important factor in the decision-making process. This is often evaluated alongside dimensions like the attractiveness of the market the company competes in, as well as the company's momentum (which Mosaic also analyzes). 

However, the process to assess a company's leadership is often subjective and labor-intensive, requiring hundreds of individual meetings. It's been made more difficult as venture capital deal-making explodes. With Management Mosaic, CB Insights enables the buyers, acquirers, and investors of technology companies to quickly and objectively assess the quality of thousands of technology companies and identify those with the strongest teams. 

Anand Sanwal, Co-founder and CEO, CB Insights: "Despite the importance of founding and management team quality to a startup's success, there has never been an objective, data-driven way to analyze this critical dimension of startup technology companies. Our aim with Management Mosaic was to change that and give our clients who are making technology purchasing, partnering, investing and acquiring decisions, an algorithmic shortcut that lets them engage with only the best startups."

Management Mosaic is available today for CB Insights customers when viewing company profiles on the platform, as part of CB Insights research, and via search when screening thousands of companies.

www.cbinsights.com