We examine private investor's funding preferences for cloud computing start-ups that provide services in various information technology (IT) areas. The funding preference is measured in funding size and frequency. Using data from CrunchBase, an unconventional dynamic database, we find significantly positive associations between the funding preference and the cloud computing services provided in IT security, and big data and data analytics among cloud computing start-ups that have received at least two rounds of funding. The association is negatively significant when the cloud computing services are provided in ERP systems and when the funding preference is measured only in size. The results suggest that private investors differentiate among start-ups by specific technology and the lifecycle of the technology. During the sample period of rapid growth in the cloud computing industry, we document that the funding preference by private investors favors start-ups that provide services in critical, newer and fast-growing IT areas.

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