On selectivity of Startup ideas: what makes entrepreneurs distinguish themselves

Abstract

We study the factors impacting the selectivity of a startup idea by an incubator and what makes certain ideas look more promising. We challenge the widely accepted notion that most successful entrepreneurs belong from big cities that are startup hotspots like Bengaluru, Mumbai, Delhi, etc and instead argue that most of the successful entrepreneurs migrated to these cities in search of success and resources. To analyse this indirect impact of immigration we developed a multilevel model. To find the most important factors behind selectivity of startup ideas, we used ordinary least square regression and logistic regression on the CIIE data that had 14996 observations of which 520 were selected for the next round of the selection process. We also looked at the impact of the language and articulation used to express the idea and the purpose in getting the idea selected. The findings suggest that there is a positive correlation in how well the founders have expressed their idea and its chances of making the cut. Lastly, we also look at what kind of commitments the founders make which reduce the perceived risk for the incubator. The analysis showed that having a team, having a cofounder, securing initial round of funding or having made a seed investment are few such commitments. Finally, we have used the longitudinal method to measure the robustness of our models over time.