Startup Mortality Rates

In my own experience, it seems like the ones that provide frequent investor updates on a regular schedule are the ones that are most successful. There&#x27;s almost a direct correlation between how often I hear from a company and how successful they are. It&#x27;s probably related to the fact that providing monthly investor updates forces a regular cadence of accountability.<p>There is also a significant time factor involved. The longer a startup has been alive, the more likely it is to have a bigger exit. Startups that go to zero tend to do so fairly quickly. And startups that end up 10x take quite a while to get there (YouTube would be a major exception to this, reaching 1.6 billion in just 1.5 years).<p>The harder to predict ones are the ones in the middle. The less than 1x returns could happen quickly or take a decade.

One might look at this and think &quot;huh 30% success is not too bad&quot; missing the fact that this is from a VC perspective.<p>From a founder perspective, this is abysmal because the chance of you getting funded by the likes of a16z or YC is already really slim, about 1% according to YC.<p>So let me ask you something: would you embark on a journey if you knew your chance of success is 0.3%?<p>So many good startups go to oblivion, pandering to the VCs. Where they could have been more resilient on their own.

I havent been involved in startups in a number of years but at the time when i was the trend was to give a bunch of 20-somethings with an interesting product idea a few million dollars and let them have at it. I wondered then and I still wonder if early stage investors would see better returns if they provided a little more boots on the ground support through either getting an adult into the room or training or whatever.

<p><pre><code> - 25% of investments make zero return (i.e. 100% write offs) - 25% produce a return greater than zero but less than 1x (i.e. are losses) - 25% produce a return between 1x-3x - 15% produce a return between 3x-10x - 10% produce a return of 10x or greater If you bucket the first two as &quot;zeros&quot; or near zeros, the third one as &quot;something you wish you hadn&#x27;t invested in&quot; and the last two as good investments, you get to roughly the same 1&#x2F;3, 1&#x2F;3, 1&#x2F;3 that I like to use. </code></pre> so breaking even is bad all of a sudden... and who needs a return greater than 0-1x when everyone&#x27;s getting paid and you have a little on the side for emergencies?

At first I thought this article was going to be a about life expectancy for startup workers vs other companies

Black swans and the Lindy Effect both play here. Sometimes hitting big with an startup more than compensate the loss of the failed ones. And odds of staying out increases with surviving time. It is not totally random that this happens, but maybe for a lot it could be only noticeable on hindsight.

I&#x27;m wondering if the investment size is normalized here? I.e. are these all ycombinator like $500K investments or is there wide range? If there is a considerable range, is there any correlation to investment size?

Those numbers seem like fairly vague estimates, and they are only for companies they chose to invest in.

50% != 1&#x2F;3.