From this paper, the average startup exits with $10 million, lasts 4 years until exit, and has 1.4 founders. Extrapolating from this gives about $1.5 million annual income per founder. (I think it’s actually somewhat less than that because I’m not accounting for e.g. the fact that investors own a portion of the company.)
I did notice the “venture-funded” clause. I mention it at the end of my comment. Perhaps I should have specified at the beginning.
I’d be interested to know how many startups get VC funding. Of course, at that point, you have to decide what qualifies as a startup. If a couple of guys make a website in their spare time and never seriously work on it, does that count as a startup?
I’d call it a startup when you work fulltime on it, and it’s designed for fast growth (as in Paul Graham’s “Startup = Growth” essay, http://paulgraham.com/growth.html)
Venture funded is a big barrier, and filters a lot of startups. But it mostly filters them by personality type. I expect that most smart, extremely resourceful, good work ethic people could get venture funding if they wanted it. These attributes are what Y Combinator filters for. But the real correlate with success (and therefore money-making) is finding product/market fit. I think that’s a lot harder than getting venture funding, and a lot more important.
I don’t know how many startups get VC funding, I suspect the percentage is single-digit.
Off the top of my head I’d say that once you hire your first employee who is not friends-and-family you can be called a startup and not just a couple of guys futzing around.
From this paper, the average startup exits with $10 million, lasts 4 years until exit, and has 1.4 founders. Extrapolating from this gives about $1.5 million annual income per founder. (I think it’s actually somewhat less than that because I’m not accounting for e.g. the fact that investors own a portion of the company.)
(EDIT: This 80,000 Hours post cites $1.4 million.)
I think you’re right. According to the same source, about 70% of startups that receive funding never make a profit.
Nope, you’re misreading the paper.
Average venture-funded startup exits with $10m. Getting to be VC-funded is a huge threshold that most startups do not reach.
I did notice the “venture-funded” clause. I mention it at the end of my comment. Perhaps I should have specified at the beginning.
I’d be interested to know how many startups get VC funding. Of course, at that point, you have to decide what qualifies as a startup. If a couple of guys make a website in their spare time and never seriously work on it, does that count as a startup?
I’d call it a startup when you work fulltime on it, and it’s designed for fast growth (as in Paul Graham’s “Startup = Growth” essay, http://paulgraham.com/growth.html)
Venture funded is a big barrier, and filters a lot of startups. But it mostly filters them by personality type. I expect that most smart, extremely resourceful, good work ethic people could get venture funding if they wanted it. These attributes are what Y Combinator filters for. But the real correlate with success (and therefore money-making) is finding product/market fit. I think that’s a lot harder than getting venture funding, and a lot more important.
I don’t know how many startups get VC funding, I suspect the percentage is single-digit.
Off the top of my head I’d say that once you hire your first employee who is not friends-and-family you can be called a startup and not just a couple of guys futzing around.