Why good companies and good incubators are made for each other
There are many ways incubator programs add value – validating a business model, providing a physical location, creating a network, etc. But funding is the one thing almost all startups want in their early stages.
We tallied the equity, debt and grant fundraising success of the companies that in 2011 joined Y Combinator, TechStars and the Venture Development Center to see if these incubators are delivering. Three years is a good timeframe to measure the continued development of participating companies.
|Venture Development Center||14||$87,485,000||$6,248,929||93%|
Companies at the Venture Development Center did not have to give up equity to become members, while those at TechStars and Y Combinator did.
In contrast to the fundraising success rate of the companies in these incubators, only about 2% of all startup companies seeking investment are successful.
You might say that we are picking good companies. It is also true that good companies are picking us. We are made for each other.