5 ms·

whats the rate of failing for startups with >$50m valuation? Is there a tracker for that as well?

Animats 8y ago
Yes. About 75% of venture-backed companies fail to return cash to investors.[1] Many of those failures are zombies - the company continues to operate, can cover its running expenses, but can't pay back its startup costs. In the ICO world, that would be considered a success. [1] https://www.fastcompany.com/3003827/why-most-venture-backed-companies-fail https://www.fastcompany.com/3003827/why-most-venture-backed-...
- seattle_spring 8y ago
  So many of them are paying people living wages, or at least had been during their lifetime. Compare that to failed or scam ICOs, which do literally 0 people any good except maybe the "founder."
  - munk-a 8y ago
    Well let's not forget about all the productive hosting business this is drumming up, some poor megacorporation is barely holding on by offering their cloud hosting services to all these ICOs. (there isn't a window fallacy we can't broken here :D)
cremp 8y ago
Valuation is different than market cap. As stated in another comment, a coin only needs to sell one unit, and because of the supply; they have a large market cap.
- TTPrograms 8y ago
  That's exactly what valuation is.
devereaux 8y ago
Ask the opposite question- rate of success for startups with >$50m valuation IMHO, it's certainly below 3.8%
- ggg9990 8y ago
  You are so wrong that I audibly laughed, even though I’m in this room by myself.
  - devereaux 8y ago
    Are you saying that, if you take 100 random startups and look say 5 years later at how many survived AND are valued over 50 millions, you have more than 3? I would like to know which distribution you sample from :-)
    - ggg9990 8y ago
      That’s not what your comment says. It says that the rate of success of startups which already have $50m valuations is less than 3.8%.
      - devereaux 8y ago
        Then I apologies for not being clear. What I meant to say, is that if we look at the coin graveyard, we are including 100% of the failed coins -- because ICO were heavily publicized. If we look at the startup survival rate, we are not including 100% of the attempt. Some will consume money, but never even make a blip on the radar. If you consider the failure rate of startups vs the failure rate of ICOs, I think ICOs show a higher success rate - and even more when you raise valuation. Here is a more extreme example: A startup valued over 1 billion is a unicorn. An ICO valued over 1 billion is at the moment (with rock bottom prices) anything above the top 18 We can disagree on the valuation formula (fair critic), but even with that a 4% success rate >50M is nothing to sneer at. It's possible to see failed startup if we use figures from an accelator, like say YC. From https://blog.ycombinator.com/yc-portfolio-stats/ https://blog.ycombinator.com/yc-portfolio-stats/ : Number of YC companies worth more than $100 million: >20 Number of companies funded by YC so far: 716 Let's say 20, and use the $100 million instead of the $50M as I can't quickly find YC numbers for $50 million. Still, 20/716 is about 2.8% So I repeat my words: a success rate of 3.8% is wonderful.

Yes. About 75% of venture-backed companies fail to return cash to investors.[1] Many of those failures are zombies - the company continues to operate, can cover its running expenses, but can't pay back its startup costs. In the ICO world, that would be considered a success. [1] https://www.fastcompany.com/3003827/why-most-venture-backed-companies-fail https://www.fastcompany.com/3003827/why-most-venture-backed-...

seattle_spring 8y ago
So many of them are paying people living wages, or at least had been during their lifetime. Compare that to failed or scam ICOs, which do literally 0 people any good except maybe the "founder."
- munk-a 8y ago
  Well let's not forget about all the productive hosting business this is drumming up, some poor megacorporation is barely holding on by offering their cloud hosting services to all these ICOs. (there isn't a window fallacy we can't broken here :D)

cremp 8y ago

Valuation is different than market cap. As stated in another comment, a coin only needs to sell one unit, and because of the supply; they have a large market cap.

TTPrograms 8y ago
That's exactly what valuation is.

devereaux 8y ago

Ask the opposite question- rate of success for startups with >$50m valuation IMHO, it's certainly below 3.8%

ggg9990 8y ago
You are so wrong that I audibly laughed, even though I’m in this room by myself.
- devereaux 8y ago
  Are you saying that, if you take 100 random startups and look say 5 years later at how many survived AND are valued over 50 millions, you have more than 3? I would like to know which distribution you sample from :-)
  - ggg9990 8y ago
    That’s not what your comment says. It says that the rate of success of startups which already have $50m valuations is less than 3.8%.
    - devereaux 8y ago
      Then I apologies for not being clear. What I meant to say, is that if we look at the coin graveyard, we are including 100% of the failed coins -- because ICO were heavily publicized. If we look at the startup survival rate, we are not including 100% of the attempt. Some will consume money, but never even make a blip on the radar. If you consider the failure rate of startups vs the failure rate of ICOs, I think ICOs show a higher success rate - and even more when you raise valuation. Here is a more extreme example: A startup valued over 1 billion is a unicorn. An ICO valued over 1 billion is at the moment (with rock bottom prices) anything above the top 18 We can disagree on the valuation formula (fair critic), but even with that a 4% success rate >50M is nothing to sneer at. It's possible to see failed startup if we use figures from an accelator, like say YC. From https://blog.ycombinator.com/yc-portfolio-stats/ https://blog.ycombinator.com/yc-portfolio-stats/ : Number of YC companies worth more than $100 million: >20 Number of companies funded by YC so far: 716 Let's say 20, and use the $100 million instead of the $50M as I can't quickly find YC numbers for $50 million. Still, 20/716 is about 2.8% So I repeat my words: a success rate of 3.8% is wonderful.