When Experts Speak:Sequential LLM-Bayesian Learning for Startup Success Prediction

Evaluating startups is inherently challenging in entrepreneurial finance, where investors confront severe information asymmetry and limited quantitative data. Leveraging a novel expert network call data, we develop an LLM-Bayesian model that analyzes these conversations at the question-answer turn level, extracting semantic and evaluative signals via large language models (LLMs) and aggregating them in a sequential Bayesian architecture. The model dynamically updates beliefs as additional expert calls occur and attenuates contradictory assessments, which are absent from existing text-based screening tools. Empirically, our model outperforms state-of-the-art benchmarks by 6.691% in F1-score and increases portfolio-level Return on Investment by 15.255%. Attention and ablation analyses reveal that conversational cues are particularly informative for technologically complex startups, young firms, diverse founding teams, and firms with low public visibility. By converting expert dialogue into continually updated probabilities, our model advances research in entrepreneurial finance and information systems and offers policy implications for improving funding outcomes for informationally disadvantaged startups.