Journal of Industrial and Systems Engineering

Journal of Industrial and Systems Engineering

Machine Learning Algorithms for Prediction of Startup Success

Document Type : Research Paper

Authors
1 Technology Management Department, West Tehran Branch, Islamic Azad University, Tehran, Iran
2 Assistant Professor, Technology Management Department, West Tehran Branch, Islamic Azad University, Tehran, Iran
Abstract
Today, startups are turning into the driving forces of the economic growth throughout the world. During the last decade, number of start-ups has grown dramatically all over the world. The very uncertain and unstable nature of startup environments in the initial stages of their activity has made it difficult to analyze and interpret information in order to evaluate their success. Therefore, investors and venture capital funds need a suitable tool to predict startups’ success rate. Considering the time complexity and computationally intensive nature of the problem, predicting startups’ success rate at the beginning of their activity with this approach requires the use of a quantitative model. In this study, the success of a start-up company is defined as their ability to reach the next stage of investment within a certain period of time. The ability to predict success is regarded as a valuable competitive advantage for venture capitalists who are looking to invest in startups. In fact, their first choices for investment are companies with faster growth potential than the competitors. Finally, the proposed model enables investors to move one step ahead of the competitors. To address this challenge, the present study provides a solution to predict the startups’ success rate in the future. Specifically, first, by collecting the data from three different sources, it examines and extracts factors affecting the startups’ success rate. Then, using machine learning methods, it presents a model for predicting the startups’ success rate, which has improved significantly compared to the previous models
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Articles in Press, Accepted Manuscript
Available Online from 20 October 2025

  • Receive Date 20 February 2024
  • Revise Date 01 May 2024
  • Accept Date 21 June 2024