Archives / August, 2014

Accelerating Accelerators

I spent the day on Thursday last week in a small classroom on the Georgetown campus reviewing finalists in the SBA’s Accelerator Competition. Announced a few months ago, the Accelerator Competition is a program of the Small Business Administration through which they are awarding $50k to each of 50 accelerators across the country to promote entrepreneurship (that’s $2.5M in total for those of you w/o a calculator handy). For a government program it has surprisingly few strings attached – it’s really an experiment by the SBA to see if they can facilitate entrepreneurship across the country through providing assistance to the various programs that support entrepreneurs around the country. Of several hundred applicants the group last week reviewed the top 99 to come…

Some more data on Venture outcomes

Quick update here. The data I site below is from Foundry LP StepStone. Since my original post I’ve confirmed with them that they’re ok with my identifying them as the source of the data. And they’ve offered to help me play with the raw data of a future report – I’ll work on some interesting updates here soon! Yesterday’s post on venture outcomes – Venture Outcomes are Even More Skewed Than You Think – generated lot of traffic. Clearly, it’s interesting to put real data against a heuristic and see how reality maps to our expectations. As I pointed out in my post, the data set from Correlation Ventures I was working with had some limitations. For starters, I didn’t…

Venture Outcomes are Even More Skewed Than You Think

The typical “successful” venture portfolio is often described as having the following outcome: 1/3 of companies fail 1/3 of companies return capital (or make a small amount of money) 1/3 of companies do well Fred Wilson, for example, described this a few years ago: I’ve said many times on this blog that our target batting average is “1/3, 1/3, 1/3” which means that we expect to lose our entire investment on 1/3 of our investments, we expect to get our money back (or maybe make a small return) on 1/3 of our investments, and we expect to generate the bulk of our returns on 1/3 of our investments. It’s a generalization but one that’s pretty well accepted in venture circles and…