Stats on Startups Registered on CrunchBase

Many thanks to Sameer Al-Sakran for compiling the numbers.

Category	 Started Funded	 %F	∑Raised	 TC Posts
Advertising	 3972	 631	 16	 $8B	 996
Biotech	 	 2787	 1770	 64	 $42B	 43
Cleantech	 1302	 719	 55	 $33B	 192
Consulting	 3330	 176	 5	 $2B	 444
Ecommerce	 5383	 868	 16	 $10B	 1587
Education	 522	 60	 11	 $½B	 90
Enterprise	 2389	 652	 27	 $10B	 993
Games video	 3992	 910	 23	 $16B	 3625
Hardware	 1726	 613	 36	 $12B	 3274
Legal	 	 306	 23	 8	 $0.1B	 16
Mobile	 	 4101	 1099	 27	 $20B	 4263
Network hosting	 1782	 340	 19	 $8B	 1375
Other	 	 33068	 2022	 6	 $24B	 2501
Public relations 2531	 468	 7	 $7B	 765
Search	 	 1437	 226	 16	 $2½B	 4625
Security	 710	 218	 31	 $4B	 135
Semiconductor	 620	 381	 61	 $9B	 27
Software	 12405	 3039	 25	 $33B	 3733
Web              12830	 2401	 19	 $29B	 14356


Category	 Acqu	 %A	IPOs	%I 	% on TC	 Avg Funding
Advertising	 221	 5½	15	½	 6½	 $2M
Biotech	         332	 12	143	5	 ½	 $15M
Cleantech	 72	 5½	39	3	 5½	 $25M
Consulting	 107	 3	15	½ 	 1½	 $½M
Ecommerce	 188	 3½	16	⅓	 12½	 $5M
Education	 4	 ¾	1	¼	 3½	 $1M
Enterprise	 257	 11	41	1½	 9	 $4M
Games video	 285	 7	30	¾	 11	 $4M
Hardware	 139	 8	81	4½	 6	 $7M
Legal	 	 2	 ½	0	0	 1	 $⅓M
Mobile	 	 275	 6½	34	1	 13	 $5M
Network hosting	 154	 8½	22	1	 8	 $4½M
Other	 	 2325	 7	101	½	 2½	 $½M
Public relations 171	 18½	32	1½	 19	 $3M
Search	 	 57	 4	4	¼	 10	 $2M
Security	 96	 13½	12	2	 7	 $6M
Semiconductor	 119	 19	51	8	 3	 $15M
Software	 1101	 9	110	1	 5	 $2½M
Web 		 827	 	57	½	 14	 $2½M

My favourite number here is the number of companies started. 12,830 Web companies started up and got a Crunchbase profile. Forget about the Facebooks and Instagrams’ buyout package to the founder, that’s the max of the sample. If you’re looking at the lower-50% CVaR, it may be $0 or less.

 

My second favourite number is that, even among the crème-de-la-crème who play these games, they have less than one-in-five chance of either acquisition or IPO.

As you might expect, stuff that’s harder to do and takes more technical expertise (semiconductors, hardware, biotech/cleantech) has a higher rate of success than stuff that can be learned in a year or two by >1% of the population (build a Rails app!). Software seems to be at a disadvantage except enterprise has a one-in-ten acquisition rate, which is quite a gamble with your life but counts as good odds in this low-probability game.

On the other hand, the software companies are much cheaper to start than cleantech/biotech (cleantech has highest avg funding). Web companies are 1 order of magnitude cheaper to start.

P.R. is also a standout, I’m guessing the 18% acquisition rate is acquihires (Sameer Al-Sakhran alluded to this). But still, this reveals that public relations must be an important part of the SF business ecosystem, or else the market is mispricing PR. But I have enough stereotypes about geeks who can’t negotiate that I can explain away the high valuation of smiley PR folks filling the niche none of the cool hackers want to talk about.

Of course, these are “running tallies” not “final fail/success rates”. It would be good to know

  • for the subset that exited, what’s the year of founding and the year of exit?
  • for the subset that didn’t exit, what’s the year of founding?

That might help us guess at what companies have been abandoned. (Did a lot of Web companies—maybe unfunded ones—make Crunchbase profiles for themselves  to put themselves on display and then quit after a few months?) It would also give a more precise idea of the number of years it takes to develop a company to IPO-ability. (“Eating Ramen” is expected for a few months, but what about if it’s half a decade?) 

If I get around to doing my own scrape, I’ll add those things—as well as some ggplots of distributions for some parameters. I’d also like to compare some Crunch-based estimates of success rates with YCombinator and TechStars, etc. That would be hard because of selection effects but still nice to see a side-by-side.

In the meantime, big thanks to Sameer for doing it first.

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About isomorphismes

Argonaut: someone engaged in a dangerous but potentially rewarding adventure.
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