Researcher ORCID Identifier


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Date of Submission


Document Type

Open Access Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Darren Filson

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© 2023 Karan S Goel


The impacts of internal conditions on startup valuations have been well studied, but external factors such as market hype and competition have been more restricted to public company valuation research. With soaring valuations in the Generative AI market, an analysis of the relation of hype and competition to startup valuations is timely. I test three hypotheses: (1) More hype about certain business or tech-focused topics is associated with higher valuations for startups operating in those areas (2) More competition is associated with lower valuations for startups (3) The positive effect of hype on valuations is offset by the negative effect of competition. Using Pitchbook, I gather firm-level data on valuations, keywords, number of employees, years since founding, funding series, industry, the number of competitors, and deal dates of software startups. Using a keyword search volume measure of hype, I regress the log of valuation on the aforementioned variables. The results show that hype is not statistically significant at the 5% level, so I rejected Hypothesis 1. Competition is statistically significant at the 5% level, but it has a positive coefficient, so I reject Hypothesis 2. Since testing Hypothesis 3 relies on Hypothesis 1 and 2 being supported, it cannot be tested. Thus, Hypothesis 3 is also rejected.