Start-up says it can predict how others will perform

SAN FRANCISCO: Is your start-up worthy of investment? Ask the venture investor in a box.

Two former Oxford University students are getting attention (and seed money) in Silicon Valley for developing new technology that automates aspects of the venture capital decision-making process.

The developers, Kirill Makharinsky, 21, and Bob Goodson, 27, call their software a "start-up predictor." They say their company, YouNoodle.com, might give an edge to venture capitalists and other investors who are trying to decide whether to sink money into an early-stage company.

In San Francisco, the YouNoodle co-founders, Bob Goodson (left) and Kirill Makharinsky, say their program can predict the fate of other tech start-ups.

"We don't want to replace investors," Goodson said. "We simply believe that industries of comparable size have utilized artificial intelligence to inform decision-making. Give us some information, and we'll give you some idea of what the company will be worth in five years."

Starting Monday, the company was emerging from a private test and was opening up parts of its Web site and services to the public.

Paul Kedrosky, a venture capitalist and the author of the blog Infectious Greed, said he did not particularly trust a company that professed to be able to do better than venture capitalists.

"If their tool did such a good job, they'd raise a fund themselves and beat the tar out of us," Kedrosky said. "It's hard to imagine what their mathematical combination of factors is."

On that point, the two founders of YouNoodle.com are not forthcoming. They say their algorithm uses sophisticated modeling that pertains to the ways social capital and networks can affect an organization's performance. They also say they are focusing in general on assessing the experiences and social and business contacts of entrepreneurs who start a company and on how the entrepreneurs within that company might fit with one another.

They certainly have their own well-heeled network. YouNoodle's financial backers include Max Levchin and Peter Thiel, co-founders of Paypal, and the Founders Fund, a venture capital firm. YouNoodle has not disclosed the amount of its seed financing.

The company plans to give away a simple version of its predictor but will charge investors who want a more powerful version of the software.

So have the founders of YouNoodle used the predictor to determine if their venture will succeed?

"So far, we haven't run ourselves through it," Goodson said, adding that the results could prove baffling. "If it says we'll fail, and it's right, that's something of a paradox."

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