Tomasz Tunguz Blog · 2014-03-03
· 4476d
Sector Competitiveness and Startup Fundraising Success: A Data Analysis
An analysis of Crunchbase data from 2004-2011 examining whether increased competition in startup sectors reduces fundraising success. The study finds that while startup formation has grown 25% annually, the correlation between number of competitors and average capital raised per company is weak (R² of -0.11), suggesting competition has minimal impact on fundraising outcomes.
Metrics in this report
Annual Startup Formation Growth Rate
25%
mean
all sectors, 12-year period
Correlation Coefficient (R²)
-0.11coefficient
average
company formation rate vs. average dollars raised per company
Variance Explained
10%
approximate
dollars raised per startup attributable to competition