Economic Impact of Startup Programs
Geoffrey Barrows from Ecole Polytecnique in Paris examines over 20,000 startups (in an anonymized data set), which have passed through structured evaluation processes on the YouNoodle platform. Through a global multi-year study, his team examines the relationship between evaluation and future success of a startup by correlating future outcome metrics (alive, successful, funding, employees, etc) and tying them back to their original evaluations.
SOME KEY TAKEAWAYS
Startup grant programs work, but only if the selection process is structured and unbiased, and the funds are distributed over the right number of startups.
A typical grant/prize (average $26k on YouNoodle) generates approx 10x as much in funding ($260k) later in that startup’s life, compared to similar startups not selected for those grants.
If the program organizers deviate from the structured distributed external evaluation format (global best practice) and partly choose their own winners based on intuition, the study finds a significantly lower impact of the grants or resources distributed.
Download the whitepaper here.