Help Me Screen: Analyzing and Predicting the Success of Start-ups in Dynamic Venture Capital Networks

Most start-ups fail, and early-stage ventures face even lower survival rates. Identifying high-potential start-ups remains a critical challenge for venture capital (VC) investors and policymakers. While predictive models exist, the evolving relationships between VC investors, start-ups, and management teams in dynamic networks are underexplored. We propose a method to predict whether a start-up will succeed within five years of its first funding round. Using a 40-year global VC dataset, we model the VC ecosystem as a dynamic bipartite network linking start-ups to individuals (investors/managers). Our approach incrementally updates graph embeddings through unsupervised self-attention to incorporate new nodes, edges, and their neighbors. Node embeddings are further fine-tuned via link prediction and classification tasks, while temporal dependencies are captured to form sequential representations. The model identifies early-stage start-ups with twice the success likelihood of those chosen by professional investors. Key factors including networking and education align with VC literature. Additionally, we provide model complexity analysis and open-source our implementation to support practical applications and future research.