1、15 August 2023AI generated image titled“Procrastination”made with Midjourney.Prompt:on a light blue canvas,a realistic optimistic painting,using vibrant colours,of a rocket launching on the right side,with a sunrise on the background-ar 2:1Startup Demographics A standardized framework for measuring

2、startup activity in tech ecosystems.Page/2 Source:Dealroom.co1.Startups create economic growth through innovation,knowledge and jobs 2.Startups create wealth for their founders,(early)employees and investors3.Startup success(and failure)creates positive spillover effects into more entrepreneurial ac

3、tivity4.Startups products and services provide consumers with greater choices5.Many startups address global challenges(climate,health,education)6.Enabling countries to build independent critical tech infrastructure:tech sovereigntyWhy it matters.Data about startup ecosystems mostly focuses on the am

4、ount of venture capital invested,the number of unicorns,et cetera.Startup Demographics looks at startup birth rates,survival rates,and success rates.This report aims to broaden the set of useful metrics for measuring and benchmarking activity in startup tech ecosystems.Secondly,it proposes a standar

5、dized framework for tracking startup progress.We welcome feedback to this report.We will work closely with our ecosystem development partners with implementing and perfecting this approach.Startup Demographics.1.Fifty shades of greatness2.The startup journey3.Startup demographicsPage/4 VC-backed tec

6、h companies Non-techApple(1976)Microsoft (1975)Saudi Aramco(1933)Alphabet(1998)Amazon(1994)Nvidia(1993)Berkshire Hathaway(1965)Meta(2004)Johnson&Johnson(1886)Tesla(2003)$2.7T$2.3T$2.0T$1.3T$1.2T$1.0T$0.8T$0.6T$0.5T$0.5TVC-backed tech companies dominate todays corporate landscape.and have created the

7、 vast majority of wealth in the last two decades.A startup is a company designed to grow fast.Being newly founded does not in itself make a company a startup.Nor is it necessary for a startup to work on technology,or take venture funding,or have some sort of exit.The only essential thing is growth.E

8、verything else we associate with startups follows from growth.Page/5 VC-backed companiesPre funding companies VC-backed$1B+companies founded since 1990$100B+companies$10B+companies$1B+companies3,500(3)$100B+$10B+$1B+340171.Dealroom estimate based on Dealroom Signal.2.Total number of funded startups

9、is over 300K,but 150K is the number that is currently active.3.Of the 3,500 there are about 1,400 unrealized unicorns and 1,300$1B+exits(the remaining 700 are unconfirmed$1B+companies).There are currently about 150K companies on a VC-backed journey.Roughly 1%of VC-backed startups reach$1B+valuation

10、while 17 have reached$100B.Current pool of 40K(1)not yet funded startups(last 3 years)In a normal year,roughly 200 companies reach a$1B valuation(almost 800 per year during 202021)12.5K startups raise their first VC round each yearCurrent pool of 150K active VC-backed startups founded since 2000(2)P

11、age/6 Bootstrapped companiesPre funding companies Bootstrapped$1B+tech companies founded since 1990$100B+companies$10B+companies$1B+companies8401Note:bootstrapped doesnt mean zero funding but it means:no(known)institutional capital.1.Dealroom estimate based on Dealroom Signal.Current pool of 40K(1)n

12、ew¬ yet funded startups$1B+companies founded since 1990$100B+$10B+$1B+VC-backed startups 5,000 bootstrapped companies are on a startup-like growth path(1)What about bootstrapping?At least 50 startups have reached the$1B+milestone without help of VC.Thats about 1%of the total startup universe.Page

13、/7$1B+companies VC-backed companiesPre funding companies Startup foundingteam origins:UniversitiesStartup alumniCorporate alumni AcceleratorsIncubatorsRepeat foundersOtherCurrent pool of 40K(1)new¬ yet funded startupsNew business formationMillions of new companies are incorporated every year.99%a

14、re not startups(or at least do not appear to be).Source:dealroom.co.Numbers are indicative.1.Based on Dealroom Signal,taking into account founder background,university affiliation,and company description.Number depends on definition of startups.Every year,about 12.5K startups raise their first VC ro

15、und.Dealroom Signal has identified a pool of 40K new and not yet funded startups.Page/8 Average share of fund returned by one exit44%10%3.7%1.7%0.0%5.0 x1.2x 5.0 x0.8 1.2x0.25x-0.8x2.0 x-5.0 x 1.0 x-2.0 x 0.5x-1.0 x 5.0 x1.2x 5.0 x0.8 1.2x0.25x-0.8x5x exit returns 44%of a VC fund(median is 25%)Selec

16、ted logos in EIFs VC fund portfolio.Full list.18%20%15%9%38%5.0 x2.0 x 5.0 x1.0 x 2.0 x0.5x 1.0 x 5.0 x2.0 x 5.0 x1.0 x 2.0 x0.5x 1.0 x5x returnhttps:/app.dealroom.co/investors/european_investment_fund Europes EIF invests in many VC funds.Past EIF research gives us a sense of the distribution of out

17、comes:4%of exits return over 5x,and thereby much of the fund.Page/9 Selected logos in Adams Street European VC fund portfolioMeanwhile,data from a prominent Fund-of-Funds shows that,among the best VC investors,18%of capital invested is allocated to startups that return 5x.Source:dealroom.co Source:A

18、dams Street Partners.Realised returns of LP investments in Europe between 20062022,presented by Adams Street Partners at SuperVenture(via James Heath).18%20%15%9%38%5.0 x2.0 x 5.0 x1.0 x 2.0 x0.5x 1.0 x2.0 x-5.0 x 1.0 x-2.0 x 0.5x-1.0 x 5.0 x2.0 x 5.0 x1.0 x 2.0 x0.5x 1.0 x5x return7F34C7724AD45C6AE

19、84385F739A2CF19C59CPage/10 Many entrepreneurs succeed after 3rd or 4th trySource:dealroom.co.Percentages are indicative.1.Based on Dealroom Signal,taking into account founder background,university affiliation,and company description.Number depends on definition of startups.Current pool of 150K activ

20、e funded startupsTotal number of funded startups is over 300KStartup failureLittle or no returnLiquidation,distressed sale or asset sale 12.5K startups raise their first VC investment each yearCurrent pool of 40K*new¬ yet funded startupsExpands to 25K+companies when using a broader definition(les

21、s growth)Based on Dealroom Signal,taking into account founder background,university affiliation,and company description.Number depends on definition of startups.Often the MVP of a startup doesnt look like a startup and companies pivot.7F34C7724AD45C6AE84385F739A2CF19C59CCurrent pool of 40K(1)new¬

22、 yet funded startupsHall of fameHigh-profile exits and unicorns5%reach a 5x+exit 1.5%(a third)reaches unicorn status(not exit per se)Unsung heroesSmaller/undisclosed exitsPart of a rollup strategyProfitable&independent70%5%25%of companies(rounded and indicative)In summary,the data directionally poin

23、ts to roughly 70%failures,5%successes and 25%lesser known exits.1.Fifty shades of greatness 2.The startup journey 3.Startup demographics Page/12 InceptionEarlyBreakoutLateThe startup journey can be broken into three stages,with new milestones and performance indicators at each stage.SizeValueProgres

24、s(=time x success)Indicators:ProfitAcquisitionsTeam backgroundTech&IPFind Product-market-fit(PMF)Find Go-to-market-fit(GTMF)High performance at scaleExpand growth opportunitiesManage&sustain rapid growthTech&IPFounding teamProduct usersHiring HeadcountValuationUnit economicsRevenuesAcquisitionsProfi

25、tabilitySecondariesExitsPage/13 InceptionEarlyBreakoutLateIn this mental framework,a$30M self-reported“seed round”becomes essentially a startup with presumed Product-Market-Fit and Go-to-Market-Fit out of the gate.SizeFocusEstablish company,create founding team,build MVP,generate initial revenuesFin

26、ding product-market fit,go-to-market fit,building startup-minded teamContinued focus on go-to-market fit,expansion into adjacent markets,growing the teamScaling the company,optimizing team structure,layered rolesInvestorsFriends&FamilyInitially angels,Pre Seed investors,accelerators,grants followed

27、by Seed and Series A investorsSeries B+investors(VC,cross-over,SWF)and follow-on from existingVC and growth investors(including crossover investors)Typical Amount Raised$50,000$250,000Up to$15 million per round$15$100 million per roundOver$100 million per roundFocusEstablish company,create founding

28、team,build MVP,generate initial revenuesFinding product-market fit,go-to-market fit,building startup-minded teamContinued focus on go-to-market fit,expansion into adjacent markets,growing the teamScaling the company,optimizing team structure,layered rolesValueIndicators:ProfitAcquisitionsPre Seed$01

29、MSeed$14MSeries A$415MSeries B$1540MSeries C$40100MMega$100250MMega+$250M+Friends&familyAngelsCorporate VCEarly-stage VCsFamily officesCrossover investorsLate-stage VCsSovereign Wealth FundsGrantsProgress(=time x success)Page/14 Early stageBreakout stageLate stageSource:dealroom.co|Created with Data

30、wrapper.deBy mapping real-life data onto this framework,we can see what the startup journey actually looks like across stages in terms of valuation$66M$22MPage/15 and we can see the startup journey in terms of headcount.Headcount heavily depends on the business model(think WhatsApp vs.Amazon).In agg

31、regate,50%of all startup jobs are at the Early Stage,highlighting the value for local communities.Early stage(50%of all jobs)Breakout stageLate stageSource:dealroom.co.Last round 2020 or later.Chart created with Datawrapper.de9212Page/16 Biotech startupLong and costly testing phasesDiscovery phase b

32、ecoming shorter*Less market risk*R&DInvestmentAcquisition/JVLab researchProduct devGo-tomarketScalingDiscovery phase TestingphasesExtended R&D phaseRegulatory approvalValueValueDeep Tech startupStarts with extended R&D phaseHigher share of technical staffOften involves hardware and/or IPEarlyBreakou

33、tLateRegular startupExploit new but proven technologiesValidate product-market fit as early as possibleR&D and patent ownership is rareDeep Tech and Biotech startups have different paths than regular startups.Value*AI,mRNA,digital therapeutics and gene editing make biotech gradually more like tech s

34、tartups,at least for discovery phase.*Theres generally a market for curing diseases.But it has long been difficult to get funding for flu vaccines,for instance.Lab researchConcept generationAnalytical proofFundamental researchProduct developmentReal world testingCommercial demosProof-of-conceptGo-to

35、-marketProductionIn operationRecruit new skillsScalingCommercialisePartner integrationScale tech1.Fifty shades of greatness 2.Startup journey 3.Startup demographicsPage/18 https:/ Early stageBreakout stageLate stageSince 2010,at least 116K startups have taken the venture-backed journey.Example:of co

36、mpanies founded in the year 2015,12,631 have gone on the VC-backed journey.Of those,5,744 have raised a Pre-Seed round,but no further round.3,104 have raised a Seed round,but no further round.141 have raised at least one$250M+round.Source:dealroom.co Page/19 About 30%of startups make it to Series A

37、or beyond.Note that these are not conversion rates between rounds.Some startups also skip the(pre)seed stage and go straight to Series A.Some bootstrapped startups hop on the VC train as late as breakout stage,or even later.For instance,over 2,000 startups have skipped some earlier stages since 2018

38、 alone.Sometimes only the Series A round is known.For conversion rates between Seed and Series A,see the separate Journey to Series A report.Year foundedPre-seed$01MSeed$14MSeries A$415MSeries B$1540M+Series C$40100MMegaround$100250MMegaround+$250M+200210050251051120031005025105Source:dealroom.co Fr

39、om Bootstrapping to VC backed.Every year,bootstrapped startups hop on the VC train at breakout or late stage.Over 2,000 startups have done so since 2018.Explore more Early stageBreakout stageLate stagePage/20 After 10 to 20 years,roughly a third of VC-backed startups have had an exit via strategic s

40、ale,buyout or IPO.Year foundedPre-seed$01MSeed$14MSeries A$415MSeries B$1540M+Series C$40100MMegaround$100250MMegaround+$250M+200210050251051120031005025105Source:dealroom.co.Preliminary data of European startups only.From Bootstrapping to VC backed.Every year,bootstrapped startups hop on the VC tra

41、in at breakout or late stage.Over 2,000 startups have done so since 2018.Explore more Page/21 Source:Dealroom.co1.Startups that are new and not yet funded2.Startups that have raised some form of venture capital3.Startups that are bootstrapping.Summary conclusions.Three distinct groups of startups.15

42、0200K Founded since 2000Grant recipientsVC-backedExited 36,500 new¬ yet funded startups 5,000 bootstrapped startups on a truly high-growth startup-like trajectory Expands to 25K+companies when using a broader definition(less growth)Based on Dealroom Signal,taking into account founder background,u

43、niversity affiliation,and company description.Number depends on definition of startups.Often the MVP of a startup doesnt look like a startup and companies pivot.Funded&activeExpands to 25K+companies when using a broader definition(less growth)New¬ yet funded startupsStartup journeyWhile every sta

44、rtup journey is different,the standardized framework presented in this report helps us make sense of startup data and draw more meaningful conclusions from it.Specifically,splitting the startup journey into three distinct stages(early,breakout,late)creates an almost universal picture that holds up a

45、cross cycles.Startup ecosystem funnel Its helpful to visualise the startup ecosystems as a funnel,where companies move from one stage to the next.By looking at cohorts,progression and outcomes,we can understand where and where the funnel is working,and where the bottlenecks are.Startup demographicsS

46、tartup ecosystems have the potential to create immense value for society.At the same time,it is normal for 70%of VC-backed startups to fail.Due to this fact,the absolute number of startups in an ecosystem is not that meaningful in isolation.Startup Demographics looks at startup birth rates,survival rates,and success rates.Get all reports on dealroom.co/reports