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  • 2023
  • Working Paper
  • HBS Working Paper Series

Beefing IT Up for Your Investor? Open Sourcing and Startup Funding: Evidence from GitHub

By: Annamaria Conti, Christian Peukert and Maria Roche
  • Format:Print
  • | Language:English
  • | Pages:55
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Abstract

We study the participation of nascent firms in open source communities and its implications for attracting funding. To do so, we link data on 160,065 U.S. startups from Crunchbase to their activities on the open source development platform GitHub. In a matched sample of firms with and without GitHub activities, difference-in-differences models reveal a substantial increase in the likelihood of being funded after firms engage with open source communities on GitHub. This relationship appears especially strong for firms working on novel technologies and negative for those facing high levels of competition, highlighting potential differences in opportunity costs of engagement. To provide insight regarding mechanisms, we classify startups’ technology use-cases on GitHub using machine learning and exploit data on product launches. Our results from these additional analyses support the notion that one important channel driving our results is the provision of access to external knowledge for technology improvement. Open source communities may thereby help startups improve their technologies to create a, at least, minimum viable product.

Keywords

Startups; Technology Strategy; GitHub; Machine Learning; Business Startups; Venture Capital; Information Technology; Strategy

Citation

Conti, Annamaria, Christian Peukert, and Maria Roche. "Beefing IT Up for Your Investor? Open Sourcing and Startup Funding: Evidence from GitHub." Harvard Business School Working Paper, No. 22-001, July 2021. (Revised August 2023.)
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About The Author

Maria P. Roche

Strategy
→More Publications

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    • Faculty Research

    Learning to Use: Stack Overflow and Technology Adoption

    By: Daniel Jay Brown and Maria P. Roche
    • March 2023
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    Accelerating AI Adoption in the U.S. Air Force

    By: Maria P. Roche and Alexander Farrow
More from the Authors
  • Incentivizing Innovation in Open Source: Evidence from the GitHub Sponsors Program By: Annamaria Conti, Vansh Gupta, Jorge Guzman and Maria P. Roche
  • Learning to Use: Stack Overflow and Technology Adoption By: Daniel Jay Brown and Maria P. Roche
  • Accelerating AI Adoption in the U.S. Air Force By: Maria P. Roche and Alexander Farrow
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