Beefing IT Up for Your Investor? Engagement with Open Source Communities, Innovation, and Startup Funding: Evidence from GitHub.

This article examines how nascent U.S. digital startups’ engagement with open source communities (OSCs) on the software development platform GitHub influences their ability to innovate and attract early-stage funding. By linking data on 160,065 startups from Crunchbase with their GitHub activities and product launches on Product Hunt, the study finds that startups engaging with external open source repositories are significantly more likely—by at least 36%—to secure funding, especially from venture capitalists and successful investors. The positive impact is strongest for startups developing novel and complex technologies, such as those in AI and blockchain, while it diminishes in highly competitive markets where appropriability concerns are greater. Evidence suggests that this relationship is driven by access to external knowledge facilitating innovation and minimum viable product development, rather than merely increasing visibility to investors.