IDEAS home Printed from https://ideas.repec.org/a/plo/pone00/0279780.html
   My bibliography  Save this article

A novel clustering approach to bipartite investor-startup networks

Author

Listed:
  • Théophile Carniel
  • José Halloy
  • Jean-Michel Dalle

Abstract

We propose a novel similarity-based clustering approach to venture capital investors that takes as input the bipartite graph of funding interactions between investors and startups and returns clusterings of investors built upon 5 characteristic dimensions. We first validate that investors are clustered in a meaningful manner and present methods of visualizing cluster characteristics. We further analyze the temporal dynamics at the cluster level and observe a meaningful second-order evolution of the sectoral investment trends. Finally, and surprisingly, we report that clusters appear stable even when running the clustering algorithm with all but one of the 5 characteristic dimensions, for instance observing geography-focused clusters without taking into account the geographical dimension or sector-focused clusters without taking into account the sectoral dimension, suggesting the presence of significant underlying complex investment patterns.

Suggested Citation

  • Théophile Carniel & José Halloy & Jean-Michel Dalle, 2023. "A novel clustering approach to bipartite investor-startup networks," PLOS ONE, Public Library of Science, vol. 18(1), pages 1-20, January.
    • Handle: RePEc:plo:pone00:0279780
    DOI: 10.1371/journal.pone.0279780
    as

    Download full text from publisher

    File URL: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0279780
    Download Restriction: no
    File URL: https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0279780&type=printable
    Download Restriction: no
    File URL: https://libkey.io/10.1371/journal.pone.0279780?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Mayra Z Rodriguez & Cesar H Comin & Dalcimar Casanova & Odemir M Bruno & Diego R Amancio & Luciano da F Costa & Francisco A Rodrigues, 2019. "Clustering algorithms: A comparative approach," PLOS ONE, Public Library of Science, vol. 14(1), pages 1-34, January.
    2. Yael V. Hochberg & Alexander Ljungqvist & Yang Lu, 2007. "Whom You Know Matters: Venture Capital Networks and Investment Performance," Journal of Finance, American Finance Association, vol. 62(1), pages 251-301, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Carolin Bock & Maximilian Schmidt, 2015. "Should I stay, or should I go? – How fund dynamics influence venture capital exit decisions," Review of Financial Economics, John Wiley & Sons, vol. 27(1), pages 68-82, November.
    2. Josh Lerner & Ramana Nanda, 2020. "Venture Capital's Role in Financing Innovation: What We Know and How Much We Still Need to Learn," Journal of Economic Perspectives, American Economic Association, vol. 34(3), pages 237-261, Summer.
    3. Nanda, Ramana & Samila, Sampsa & Sorenson, Olav, 2020. "The persistent effect of initial success: Evidence from venture capital," Journal of Financial Economics, Elsevier, vol. 137(1), pages 231-248.
    4. Yuejia Zhang, 2018. "Gain or pain? New evidence on mixed syndication between governmental and private venture capital firms in China," Small Business Economics, Springer, vol. 51(4), pages 995-1031, December.
    5. Li, Lu & Li, Yihang & Wang, Xueding & Xiao, Tusheng & Zhu, Hongjun, 2022. "Hedge fund networks, information dissemination, and stock price comovement: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 83(C).
    6. Hannes Maxin, 2020. "Corporate venture capital and the nature of innovation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 29(1), pages 1-30, January.
    7. L. Bottazzi & M. Da Rin & T. Hellmann, 2007. "The Importance of Trust for Investment: Evidence from Venture Capital," Working Papers 612, Dipartimento Scienze Economiche, Universita' di Bologna.
    8. Y. Sekou Bermiss & Benjamin L. Hallen & Rory McDonald & Emily C. Pahnke, 2017. "Entrepreneurial beacons: The Yale endowment, run‐ups, and the growth of venture capital," Strategic Management Journal, Wiley Blackwell, vol. 38(3), pages 545-565, March.
    9. Carolin Bock & Martin Watzinger, 2019. "The Capital Gains Tax: A Curse but Also a Blessing for Venture Capital Investment," Journal of Small Business Management, Taylor & Francis Journals, vol. 57(4), pages 1200-1231, October.
    10. Maurice McCourt, 2022. "Permanent private equity: Market performance and transactions," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 45(2), pages 339-383, June.
    11. Chuluun, Tuugi, 2015. "The role of underwriter peer networks in IPOs," Journal of Banking & Finance, Elsevier, vol. 51(C), pages 62-78.
    12. Tom Vanacker & Veroniek Collewaert & Ine Paeleman, 2013. "The Relationship between Slack Resources and the Performance of Entrepreneurial Firms: The Role of Venture Capital and Angel Investors," Journal of Management Studies, Wiley Blackwell, vol. 50(6), pages 1070-1096, September.
    13. Fernandez Martinez, Roberto & Lostado Lorza, Ruben & Santos Delgado, Ana Alexandra & Piedra, Nelson, 2021. "Use of classification trees and rule-based models to optimize the funding assignment to research projects: A case study of UTPL," Journal of Informetrics, Elsevier, vol. 15(1).
    14. Gaonkar, Shweta & Mele, Angelo, 2023. "A model of inter-organizational network formation," Journal of Economic Behavior & Organization, Elsevier, vol. 214(C), pages 82-104.
    15. M. Knockaert & T. Vanacker, 2011. "The Association between Venture Capitalists Selection and Value Adding Behavior: Evidence from Early Stage High Tech Venture Capitalists," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 11/741, Ghent University, Faculty of Economics and Business Administration.
    16. Ruiqi Li & Lingyun Lu & Weiwei Gu & Shaodong Ma & Gang Xu & H. Eugene Stanley, 2020. "Assessing the attraction of cities on venture capital from a scaling law perspective," Papers 2011.06287, arXiv.org.
    17. Lohwasser, Todor S., 2020. "Meta-analyzing the relative performance of venture capital-backed firms," Discussion Papers of the Institute for Organisational Economics 4/2020, University of Münster, Institute for Organisational Economics.
    18. Chahine, Salim & Fang, Yiwei & Hasan, Iftekhar & Mazboudi, Mohamad, 2019. "Entrenchment through corporate social responsibility: Evidence from CEO network centrality," International Review of Financial Analysis, Elsevier, vol. 66(C).
    19. Xue, Chaokai & Jiang, Ping & Dang, Xinghua, 2019. "The dynamics of network communities and venture capital performance: Evidence from China," Finance Research Letters, Elsevier, vol. 28(C), pages 6-10.
    20. Fenghua Wen & Yujie Yuan & Wei‐Xing Zhou, 2021. "Cross‐shareholding networks and stock price synchronicity: Evidence from China," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 914-948, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:plo:pone00:0279780. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: plosone (email available below). General contact details of provider: https://journals.plos.org/plosone/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.