Reasoning-Based AI for Startup Evaluation (R.A.I.S.E.): A Memory-Augmented, Multi-Step Decision Framework

We present a novel framework that bridges the gap between the interpretability of decision trees and the advanced reasoning capabilities of large language models (LLMs) to predict startup success. Our approach leverages chain-of-thought prompting to generate detailed reasoning logs, which are subsequently distilled into structured, human-understandable logical rules. The pipeline integrates multiple enhancements - efficient data ingestion, a two-step refinement process, ensemble candidate sampling, simulated reinforcement learning scoring, and persistent memory - to ensure both stable decision-making and transparent output. Experimental evaluations on curated startup datasets demonstrate that our combined pipeline improves precision by 54% from 0.225 to 0.346 and accuracy by 50% from 0.46 to 0.70 compared to a standalone OpenAI o3 model. Notably, our model achieves over 2x the precision of a random classifier (16%). By combining state-of-the-art AI reasoning with explicit rule-based explanations, our method not only augments traditional decision-making processes but also facilitates expert intervention and continuous policy refinement. This work lays the foundation for the implementation of interpretable LLM-powered decision frameworks in high-stakes investment environments and other domains that require transparent and data-driven insights.

GPT-HTree: A Decision Tree Framework Integrating Hierarchical Clustering and Large Language Models for Explainable Classification

This paper introduces GPT-HTree, a framework combining hierarchical clustering, decision trees, and large language models (LLMs) to address this challenge. By leveraging hierarchical clustering to segment individuals based on salient features, resampling techniques to balance class distributions, and decision trees to tailor classification paths within each cluster, GPT-HTree ensures both accuracy and interpretability. LLMs enhance the framework by generating human-readable cluster descriptions, bridging quantitative analysis with actionable insights.

GPTree: Towards Explainable Decision-Making via LLM-powered Decision Trees

Traditional decision tree algorithms are explainable but struggle with non-linear, high-dimensional data, limiting its applicability in complex decision-making. Neural networks excel at capturing complex patterns but sacrifice explainability in the process. In this work, we present GPTree, a novel framework combining explainability of decision trees with the advanced reasoning capabilities of LLMs. GPTree eliminates the need for feature engineering and prompt chaining, requiring only a task-specific prompt and leveraging a tree-based structure to dynamically split samples. We also introduce an expert-in-the-loop feedback mechanism to further enhance performance by enabling human intervention to refine and rebuild decision paths, emphasizing the harmony between human expertise and machine intelligence. Our decision tree achieved a 7.8% precision rate for identifying "unicorn" startups at the inception stage of a startup, surpassing gpt-4o with few-shot learning as well as the best human decision-makers (3.1% to 5.6%).