valuationThe probability of success of a startup is extremely small. What is the probability of success knowing that the startup had a few rounds of funding (~$100M) and already more than 100 employees ? By success I mean see its valuation do 10x over the next few years Thanks!
Funding and employees doesn’t mean its necessarily a successful company. Some companies are great at convincing people to give them money but really bad at producing anything.
Here are some prime examples:
Rdio - Streaming music service that raised about $200m in funding and closed its doors.
Kior - Biofuel Tech Company, spent $600m then filed for bankruptcy. Was VC funded.
In fact, I’ve found an entire article that lists 77 of the Biggest Startup Failures of All-Time which uses $100m in funding as its bottom-end.
As Ron has already put very neatly, I would build upon his view with a similar example from India: Housing
It used to be high riding unicorn of India, much above the likes of Paytm, Flipkart, etc. Raised massive rounds of funding, fancy offices, state-of-the-art perks and best-you-can-get engineers.
However, it is slowly falling to ruins. Some/several bad decisions in the vision and operations was the cause of it.
So, all that funding and employee count tells you how successful you are, and definitely not how successful you would be. And it is also very wrong to assume that companies which haven't raised funding wouldn't succeed. Bootstrapped companies are doing extremely well.
So, as the startups domain is highly stochastic, one cannot really predict success exactly. However, the assumption that num. of employees and funding is directly proportional to success is very wrong.
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