What is the success rate of venture and angel-funded startups?  (Success
= IPO or acquisition for more than the valuation at the last funding
round.)

I've already done a few hours' worth of searching about this.  I find
site after site saying that 1 in 10 startups succeeds, but never any
source for this number.  I'm looking for a number with something behind
it, or at least a quote by someone who might know what he's talking
about.  The best I can find is a quote by a Prof. Alper on Cringely's
site, but I can't find any more by him, or even his email addr.

---

Request for Question Clarification by bobbie7-ga on 14 Feb 2005 08:23 PST

Hello Bugbear,

Factors Affecting The Success Of Internet Startups

"Business professor Sea Jin Chang considered Internet portals and
companies involved in e-commerce for products and services founded
between January 1994 and June 2000. The study seeks to pinpoint the
influence that venture capital and strategic alliances have on a
startup's performance, as measured by if and when it undertakes an
IPO."

"The author found strong evidence that the reputation of the
venture-capital firm and the presence of strategic alliances had a
significant impact on IPO success. Companies backed by VC firms with
an average IPO rate of 30% enjoyed returns far higher than those
funded by venture capitalists with an average success rate of 10%."


Abstracted from: Venture Capital Financing, Strategic Alliances, And
The Initial Public Offerings Of Internet Startups
By: Prof. Sea Jin Chang  Korea University (South Korea)
Journal of Business Venturing - Vol. 19, No. 5, Pgs. 721-741
http://www.bowne.com/newsletters/newsletter.asp?storyID=1003

Is this the type of information you require?

Thanks,
Bobbie7

---

Clarification of Question by bugbear-ga on 15 Feb 2005 14:54 PST

Not really.  It's only about IPOs.  Most startups that succeed do
it by getting bought.  Also, it's a pretty narrow segment of the
startup world.

Perhaps the following excerpt might be helpful:

?We can gain an idea of the success of the venture capital industry in
Singapore indirectly. Wang, et. al (2002) found that between 1987 and
1999, there were 63 companies backed by venture capital that were
listed on the Singapore stock exchange. This translates into a success
rate of about 10%, considering the number of firms backed by venture
capital totaled more than 630 companies (Economic Development Board).?

Singapore Management University
http://www.research.smu.edu.sg/faculty/edge/entrep_fin/papers/SER-VCandGrowth_WP_dec_2002.pdf