Startup Index: Y Combinator Companies Have More Than 2x the Momentum of 500 Startups, 3x Techstars
Momentum measures a quantity of motion, measured as a product of its mass and velocity. In case we want to measure the momentum of a startup (the â€œbodyâ€) where mass is the companyâ€™s share of web traffic (as measured by Alexa rank) and velocity is the growth trajectory of several different signals (social, inbound links, page rank, etc). It is weighted toward sustained growth, versus small spurts of growth from press coverage or a burst of paid traffic or Twitter/Facebook followers. Larger companies (by traffic) who see a decline in growth across these signals will be the hardest hit, so the worst place to be on this list is in the approaching 0 momentum points.
Earlier this week we released the April 2013 Startup Index, which tracks over 1,000 companies in the investor portfolios we’ve indexed with at least 4 weeks of data. Now let’s take a look at the 3 most talked about early stage investment programs and compare the momentum of their portfolio companies.
While the percentage of active companies in each portfolios differs by just a few percentage points, the total momentum points vary widely. For example the top 500 Startups company Virool (which is was also part of YC S12) has 27.69 momentum points in April, but in the YC portfolio there are 10 companies which have more momentum than this. Similarly the top TechStars company Digital Ocean has 18 momentum points, but 500 startups has 5 companies with more momentum in this and Y Combinator has 17 that rank higher.
These differences seem to line up with differing investment philosophies. While Paul Graham of Y Combinator is focused on “Black Swan Farming” for the one home run company in each batch, Dave McClure of 500 Startups is building a portfolio around companies hitting solid singles and doubles, while Techstars takes a geographically diversified approach. As we continue to collect data it will be interesting to see if greater momentum results in more exits.
April Startup Moment Index: Y Combinator, 500 Startups & Tech Stars
Full Disclosure: both Y Combinator and 500 Startups are investors in Referly, where I am founder and CEO.
Photo credit: New York Daily News
Love the baseball analogy. Does that make refer.ly a possible inside the park homerun since you have Y and 500 on your side? 😉
99% of the companies can’t even be recalled in that list 🙂 …
(How) can or does this include relative performance to size of portfolio? Would be interesting to see how this would look graphically. 500 & yc have a lot more companies under their belt, not even talking about the different programs and locations of the individual TS cohorts.
Seeing SendGrid so low on the list when they are absolutely crushing it (hundreds of employees, billions of emails sent, well-funded, etc.) makes me question the integrity of the data and analysis…I don’t even have any affiliation with them btw, just know that they should be much higher on the list.
Danielle, have you done a 2015 version of this? Would be interesting to contrast and see what has changed in the last 2 years.