SBIR Phase I:Assessing Private Company Creditworthiness Using Advanced Information Extraction and Translation Techniques

This Small Business Innovation Research (SBIR) Phase I project addresses the challenge of offering reliable, actionable and real-time intelligence about private companies - a challenge acutely felt by financial institutions, investors, service providers, researchers and entrepreneurs. The company plans to develop a platform that will (1) collect information on private companies from millions of relevant sources; then (2) extract and structure this information and finally (3) algorithmically deliver an ongoing quantitative measure of company creditworthiness and health - thus developing a Private Company Strength & Sentiment Score. The Phase I research is comprised of three stages: (1) Set Up, which includes the identification of Strength and Sentiment Indicators (SSIs) that drive the score as well as identification of relevant data sources; (2) Data & Technology, which includes optimizing existing technology for collection of SSI data as well as collecting real financial and operating private company data for a test sample; and (3) Analysis, which includes preparing the data set, running statistical analyses and creating SSI scores. This final step of Phase I entails examining correlations between outputs and the empirical data collected for private companies so that predictive value can be assessed.
The primary commercial benefit of this effort will be the increased availability of competitively priced credit to US small businesses. If successful, the effort will reduce the information asymmetry surrounding private company information and thus allow financial institutions to better estimate the initial and ongoing risk associated with private small businesses who may be seeking credit. Broader societal impacts resulting from increased credit availability to small businesses include increased "economic growth, employment and payrolls at businesses of all sizes" according to the SBA Office of Advocacy. In addition to benefitting institutional lending, the effort has the potential to offer significant upside to those businesses providing trade credit or supplier financing of purchases as well as to the equity investment community, e.g., venture capital, private equity. Longer-term, the data collected to create and track companies' scores represents a rich repository of entrepreneurial & private company data that can be leveraged to create data-driven offerings that assist entrepreneurs, academics, researchers and public policy professionals their attempt to understand and support our nation's entrepreneurial ecosystem.