UNC Kenan-Flagler Business School

Shaping Leaders, Driving Results

UNC Kenan-Flagler Business School

ROI: RESEARCH INSIGHTS FROM KENAN-FLAGLER


Connect the Dots

5/22/2013

The “Dealmaker Algorithm” brings entrepreneurs and market-makers together. 

Finding dealmakers matters. Entrepreneurs need help turning bright ideas into money-making businesses. And entrepreneurial ecosystems need them to improve the economic performance of their regions.

Ted Zoller’s “Dealmaker Algorithm” can locate those market-makers who unlock the potential of a region through their sophistication in making investments.

Zoller, director of the Center for Entrepreneurial Studies and associate professor of strategy and entrepreneurship at UNC Kenan-Flagler, drew on a database of firms and equity transactions maintained in Standard and Poor’s Capital IQ for the data underlying his algorithm.

He is in regular contact with people who have unique ideas that could revolutionize an industry, but they don’t always know how to find the investors who could help them bring their products to market.

“Dealmakers become the sherpas for entrepreneurs,” Zoller said. “They quietly go about their work to create syndicates that broker resources and shape, interconnect and ultimately drive new ventures to success.”

The Blackstone Charitable Foundation has leveraged the algorithm to build a $3.6 million project in the Research Triangle called the Blackstone Entrepreneurs Network (BEN). BEN will encourage the formation of networks of serial entrepreneurs in underperforming communities, enabling the foundation to narrowly devote resources and talent on the specific people who increase economic activity around them, said Amy Stursberg, Blackstone’s executive director.

“Every community is different,” Stursberg said. “Ted’s work identifying regional dealmakers and serial entrepreneurs means we can strategically target our initiatives to connect the right people into an ecosystem that eliminates entrepreneurial barriers and speeds the creation of companies and jobs.”

Zoller’s research revealed that the quality of the aggregate network matters more than the quantity. He examined the degree to which serial entrepreneurs and investors were connected to one another and learned that the more efficient the connections, the more vibrant the economy.

“Look for closely connected serial entrepreneurs and investors,” Zoller said, “and you’ll find a high-performing economy.”

The Dealmaker Algorithm

It establishes social network connections among the players to:

• Show dealmaker characteristics (the serial entrepreneur, the CEO or manager of a high-growth company, and the serial investor

• Reveal syndicates

• Highlight the dealmaker’s central role in bringing new ventures to fruition

Ted Zoller is director of the Center for Entrepreneurial Studies and associate professor of strategy and entrepreneurship at UNC Kenan-Flagler.