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Startup Accelerator Fail: Most Graduates Go Nowhere

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Re: Startup Accelerator Fail: Most Graduates Go Nowhere

#21

Post by pg »

snambi wrote: post #17
pg wrote: post #11

Exits are a stupid test for what they're trying to measure here. By that standard, Airbnb and Dropbox are failures. Exits are a reasonable test for investments made, say, 10 years ago. But none of the incubators are that old yet. So the right way to judge them is by the valuations of the startups they've funded. Unless the venture business as a whole loses money, that will be a lower bound on the eventual exit number…

If the startup is profitable and self sustain itself, does it count as success or failure?

To the algorithm they use in this study, it counts as a failure unless the company is public, which is my point here.

To investors, whether an investment is a success or a failure is indeterminate till the company either goes out of business or returns the capital invested.

Re: Startup Accelerator Fail: Most Graduates Go Nowhere

#22

Post by Porter_423 »

This is very interesting. I mentor at both 500 Startups and i/o Ventures who have accelerator programs. I know a high percentage have gone on to funding, and a number of happy exits. (Not Instagram exits, but great first experiences for the founders). I can't speak if these are still the exception and not the norm though.

Re: Startup Accelerator Fail: Most Graduates Go Nowhere

#23

Post by mikescar »

ilamont wrote: post #7

Report author: "It takes years for companies to get traction and get an exit." "There were not enough exits to evaluate" Yet RWW concludes "startup accelerator fail" and "a lot of accelerators are just spinning their wheels." Here's another hypothesis: The lack of exits reflects the fact that most accelerators are themselves only a few years old, and it takes a longer period of time to build a successful venture and…

And the author was somehow able to conclude that YC and the two accelerators his firm invests in are all at the top.

Re: Startup Accelerator Fail: Most Graduates Go Nowhere

#25

Post by kjhughes »

jroseattle wrote: post #18

Not sure if others share the same view, but I view many startup accelerators as startups themselves -- heck, nearly the entire industry is a startup. We should assume that startup accelerators themselves can fail. The Y-Combinators and TechStars are the Tier-1 players in this space, but that's only getting their members to reach funding -- certainly nothing about exits. Evaluating accelerators should be akin to evalu…

Idea: Form an accelerator for accelerators. SeedJerk.com is available.

Re: Startup Accelerator Fail: Most Graduates Go Nowhere

#26

Post by michael_fine »

pg wrote: post #11

Exits are a stupid test for what they're trying to measure here. By that standard, Airbnb and Dropbox are failures. Exits are a reasonable test for investments made, say, 10 years ago. But none of the incubators are that old yet. So the right way to judge them is by the valuations of the startups they've funded. Unless the venture business as a whole loses money, that will be a lower bound on the eventual exit number…

Isn't measuring by average valuation a little dissonant with how the valuations play out? If startup valuations follow a power law, and most of the money is made from a few successful exits, wouldn't it make more sense to judge incubators by say, their top 10%, while also showing the total number of startups for comparison?

Re: Startup Accelerator Fail: Most Graduates Go Nowhere

#27

Post by waterlesscloud »

pg wrote: post #14
kylebrown wrote: post #13

Earlier quoted context omitted.

How about median valuation?

The trouble with median valuation is that even for the most successful incubators it will approach zero, because I doubt any of us are going to have a success rate over 50%.

Hmm. But isn't that getting at the point they're making here?

Re: Startup Accelerator Fail: Most Graduates Go Nowhere

#28

Post by startupfounder »

jroseattle wrote: post #18

Not sure if others share the same view, but I view many startup accelerators as startups themselves -- heck, nearly the entire industry is a startup. We should assume that startup accelerators themselves can fail. The Y-Combinators and TechStars are the Tier-1 players in this space, but that's only getting their members to reach funding -- certainly nothing about exits. Evaluating accelerators should be akin to evalu…

"I view many startup accelerators as startups themselves"

That is why they started the http://incubatorincubator.com/ Incubate your incubator...

Re: Startup Accelerator Fail: Most Graduates Go Nowhere

#29

Post by TimGebhardt »

waterlesscloud wrote: post #27
pg wrote: post #14

Earlier quoted context omitted.

The trouble with median valuation is that even for the most successful incubators it will approach zero, because I doubt any of us are going to have a success rate over 50%.

Hmm. But isn't that getting at the point they're making here?

But VC investing is a hit-driven business. One big hit, like a Dropbox, funds all the rest. Unless you're really good at picking horses, you'll have the same median as everyone else.
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