How many start-ups in the US get seed/VC funding per year?
In very general terms, roughly 1,500 startups get funded by venture capitalists in the US, and 50,000 by angel investors. VCs look at around 400 companies for every one in which they invest; angels look at 40.
There are several million “startups” that are formed each year, so one way of looking at it is that there are several million “great people with a good idea who give up because they just cannot get initial funding”.
On the other hand, those VCs and angel investors spend all their time proactively seeking the best companies they can find, and despite their concerted efforts at picking the best of the best, fully half of the ones they do fund will go out of business with a couple of years. Looked at that way, of the 50,000-60,000 deals that get funded each year 30,000 of them should not have been funded (let alone the other few million who wanted funding)… therefore there are no really great people with really great ideas who go unfunded.
Of course, the reality lies somewhere between those two extremes, but my personal guess, as someone who is familiar with the issue from both sides of the table, is that “lack of available funding for truly deserving deals” is not one of the biggest challenges facing entrepreneurship in the US.
*original post can be found on Quora @ : http://www.quora.com/David-S-Rose/answers *
Written by David S. Rose
You might also be interested in
Angel Investors Spotlight: An Inside Look at Hudson Valley Startup Fund’s Investment Process & Advice for Founders
Hudson Valley Startup Fund brings together a network of the region’s successful business and community leaders to give back, supporting the launch of the next Hudson Valley visionaries. We sat down with fund managers Chad Gomes, Johnny LeHane and Paul Hakim as they shared insights into their investment process, what they look for in both group members and startups, and
If you are a new entrepreneur, or entering a new business area, it’s always worth your time to assemble an Advisory Board of two or three executives who have travelled that road before. You need them before you need funding, and if you select the wrong people, or use them incorrectly, no amount of money will likely save your startup.
There are many wonderful ideas, and they are not necessarily easy to come up with. So congratulations on having thought of one!
“Having value” and “Being fundable” are two completely different things. What the more experienced responders here are saying is completely accurate: while a good idea is usually a necessary ingredient for the formation of a good company, it is
No, but there are several sets of courses on angel investing that can provide a good base from which to start. The most comprehensive and best known is the Power of Angel Investing seminar series developed by the Angel Resource Institute (formerly known as the Angel Capital Education Foundation, and prior to that part of the Angel Capital Association). It
Some entrepreneurs forget that they can’t use people the same way they use technology to build a startup. Inventors, for example, are skilled in manipulating technology, but may have little interest or experience engaging people to make an effective team. Unfortunately, startups are not one-man shows, so entrepreneurs need to study leadership as much as they study technology.