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I don't think it's a barometer by which start-ups are judged. Instead, use it as a single data point for each company and 6 data points (for 2009 alone) for Tec

by quigebo 17y ago

I don't think it's a barometer by which start-ups are judged. Instead, use it as a single data point for each company and 6 data points (for 2009 alone) for TechStars

webwright 17y ago
"I don't think it's a barometer by which start-ups are judged." I disagree-- it's a great barometer for startups at this stage (though certainly not the ONLY one). It's certainly strongly correlative to liquidity (take 100 companies that had a meaningful-for-angel/seed-investor exit and count the ones that took ZERO investment beyond that). Or, closer to home... Look at the YC startups that are likely make YC a significant return. How many of them took no additional funding? Or, if you really want to ignore liquidity/return for the investors... Look at the YC companies that experienced the most growth. How many of them took no additional funding?
- petenixey 17y ago
  You've got to decide whose return you want to measure - the investor or the entrepreneurs'. Look at the most profitable YC startups (Weebly, Wufoo (others?)) and one took no further money, one took angel. I can only think of two of the ones who raised big money which are making revenues of the same order that I believe Wufoo is generating and certainly their profits are a fraction thereof. Startups in the Valley are well optimised for Venture Capital but that's not the same thing as optimising for revenue or profitability.
  - webwright 17y ago
    Yaw, that's totally true. This is from the TechStars blog-- the only metric they ultimately care about is return on investment. So this is a big win for them. A huge exit/IPO just about NEVER fails to have a Series A. Given MY tolerance for risk, I'm probably prefer to own Weebly or Wufoo before most other YC companies... But I think it's unlikely that they'll be a HUGE win for YC (9-figure exit, that is). Entrepreneurs generally (maybe just sometimes?) get into the startup world in the hope that they'll see a multi-million dollar exit (to compensate for the risk and the lack of salary for a chunk of time). For people motivated that way, the Series A is a big deal. Wade through data of $5m+ exits and I think we'd find that the non-funded startup is pretty scarce. Wad through the $20m+ exists and I think they'd be functionally non-existent. Weebly took $650k according to CrunchBase, so they'd fall into the 6 out of 10 TechStars group, FWIW.
    - deleted 17y ago
      [deleted]

by quigebo 17y ago

I don't think it's a barometer by which start-ups are judged. Instead, use it as a single data point for each company and 6 data points (for 2009 alone) for TechStars

webwright 17y ago

"I don't think it's a barometer by which start-ups are judged." I disagree-- it's a great barometer for startups at this stage (though certainly not the ONLY one). It's certainly strongly correlative to liquidity (take 100 companies that had a meaningful-for-angel/seed-investor exit and count the ones that took ZERO investment beyond that). Or, closer to home... Look at the YC startups that are likely make YC a significant return. How many of them took no additional funding? Or, if you really want to ignore liquidity/return for the investors... Look at the YC companies that experienced the most growth. How many of them took no additional funding?

petenixey 17y ago
You've got to decide whose return you want to measure - the investor or the entrepreneurs'. Look at the most profitable YC startups (Weebly, Wufoo (others?)) and one took no further money, one took angel. I can only think of two of the ones who raised big money which are making revenues of the same order that I believe Wufoo is generating and certainly their profits are a fraction thereof. Startups in the Valley are well optimised for Venture Capital but that's not the same thing as optimising for revenue or profitability.
- webwright 17y ago
  Yaw, that's totally true. This is from the TechStars blog-- the only metric they ultimately care about is return on investment. So this is a big win for them. A huge exit/IPO just about NEVER fails to have a Series A. Given MY tolerance for risk, I'm probably prefer to own Weebly or Wufoo before most other YC companies... But I think it's unlikely that they'll be a HUGE win for YC (9-figure exit, that is). Entrepreneurs generally (maybe just sometimes?) get into the startup world in the hope that they'll see a multi-million dollar exit (to compensate for the risk and the lack of salary for a chunk of time). For people motivated that way, the Series A is a big deal. Wade through data of $5m+ exits and I think we'd find that the non-funded startup is pretty scarce. Wad through the $20m+ exists and I think they'd be functionally non-existent. Weebly took $650k according to CrunchBase, so they'd fall into the 6 out of 10 TechStars group, FWIW.
  - deleted 17y ago
    [deleted]