February 2014 will go down in history as a month with two huge startup exits: Nest (acquired by Google for a whopping $3.2 billion) and WhatsApp (acquired by Facebook for an even more whopping $19 billion).
If you haven’t caught the startup bug, there’s a good chance you will have caught it after this. What’s everybody waiting for? Let’s all go start companies!
Lest everybody get carried away with these success stories, let’s look at some statistics. In May 2013, Paul Graham, founder of Y Combinator—arguably the most prestigious incubator in the U.S.—tweeted an interesting piece of data: 37 of the 511 YC companies to date had valuations of, or had sold for, $40 million or more. That’s great for the companies in the list (which includes Dropbox). But what about the 474 left off the list?
Not to be a wet blanket, but this statistic basically says an elite startup, incubated by the best of the best, has a less than 1 in 10 chance of becoming a big success.
Read the full post at Xconomy.
Elaine Chen is a Senior Lecturer in the Martin Trust Center for Entrepreneurship.