31–40 of 64 posts
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?
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%.
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?
Earlier quoted context omitted.
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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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.
Earlier quoted context omitted.
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.
That's why I liked dan shipper's (rather timely) blog post the other day about choosing to build a sustainable business instead of swinging for a homerun, and striking out.
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…
http://www.slideshare.net/dgiluz/accellerators-in-us-and-eur...
No mention of the 10 VC's that I can find.
Earlier quoted context omitted.
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.
Earlier quoted context omitted.
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?
If you're measuring them as investors, you want the average, because if (as all these incubators do) they invest roughly the same amount in every startup, then average is money out divided by money in.
Earlier quoted context omitted.
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.
That's why I liked dan shipper's (rather timely) blog post the other day about choosing to build a sustainable business instead of swinging for a homerun, and striking out.