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500 Startups and Techstars are also leading accelerators for getting their companies funded
I cover a lot of startups, and there often seems to be this notion that they kind of sprang out of nowhere, fully formed. The reality is, though that they take a lot of time, and a lot of pivoting, to become what they are. Accelerators are an extremely important part of that.
There are a lot of accelerators out there, probably more than you'd think. A few years ago, Vator did a series of articles about accelerators around the country. We focused on the big cities that you probably already associate with tech, like San Francisco, New York, Los Angeles and Boston. But we also looked at the small cities around the country, and what I found was that there is a tech scene in places I had never even considered, like Kansas City, Atlanta, Baltimore and Indianapolis
Let's be real, though. There are three accelerators we all think of right away: Y Combinator, 500 Startups and Techstars. And they attract a huge amount of interest from VCs looking for the next big startup.
Pitchbook put together an interesting graph, showing which venture capital firms were most active in funding graduates from these startups. And, would you believe it, Y Combinator is, by far, the biggest accelerator out there. Are you shocked to learn that?
The largest investor in in these startups is SV Angel, which has invested in 81 Y Combinator graduates alone, including Call9, SEED Platform, Interviewed, Triplebyte, and Eden Technology Services. The firm also invested in nine companies that came out of 500 Startups, including WePay, LeadGenius and Storefront, as well as eight from Techstars, including Veri, Romotive and Hullabalu.
While these are the three top accelerators, it's basically Y Combinator and then everybody else, because, of course. Those 81 invesments from SV Angel are nearly as many as 500 Startups got from all the investors on this list, with 85. And it's more than triple the 26 investments that Techstars graduates got.
Along with the huge number of investments from SV Angel, Andreessen Horowitz has invested in 46 of its graduates, including Gobble, CombatCode and Grafly. FundersClub invested in 45, including Moltin, Flexport and Cleanly. Start Fund had invested in 39, including Mattermark, Videopixie and One Month.
I don't want to discount the other two accelerators, though. They are also pretty darn good at getting their companies funded.
For Techstars, the most active venture capital firm, by far, has been Foundry Group, which has invested in 15 of its graduates. That includes Ello.co, Brightwurks, Loop Labs, Sickweather and AdsNative. Only SV Angel and Kima Ventures came close, with eight investments apiece.
The biggest investor in companies to come out of 500 Startups was SoftTech VC, which has made 10 investments, including Popout, BetterDoctor, Visual.ly, StyleSeat and NewHound. Interestingly, the firm had no investments in any Techstars, and only seven in Y Combinator, one of the lowest on the list.
So why do these three, and Y Combinator in particular, see so much action? It might simply come down to having relationships with these VCs, as well as having the best reputations for producing good companies.
"Just as some businesses and people like to work together, some VCs seem to gravitate toward certain accelerators. While there are a handful of possible reasons for this, ranging from alignment of industry focus to an appreciation of how a specific accelerator trains its classes, being knowledgeable about these relationships can help empower entrepreneurs who are looking to narrow down which program to apply to," Pitchbook wrote.
Since 2005, Y Combinator had funded over 800 startups. Techstars was founded in 2006 and has funding 762 c
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SoftTech VC is one of the original micro VC firms, founded in 2004 and backing over 135 early-stage start-ups. Based in Palo Alto, the firm manages two institutionally-backed funds and invests in Silicon Valley, New York, Southern California, Boulder and Canada. SoftTech VC is among the most active investors in early stage consumer Internet and B2B startups, consistently investing in 20 new opportunities a year. We seek great entrepreneurs, differentiated products and large market opportunities. More information available at www.softtechvc.com.
Founder and managing partner Jeff Clavier launched SoftTech VC in 2004, making the original 20+ investments (our non-traditional ‘Fund I’) as a business angel, investing his own capital, time and experience. As one of the original ‘super angels’ in the valley, Jeff developed SoftTech VC’s implementation of the micro-vc concept which has become so popular.
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500 Startups is an early-stage seed fund and incubator program located in Mountain View, CA. They invest primarily in consumer & SMB internet startups, and related web infrastructure services. Their initial investment size is typically $25K-$250K.
Selected areas of interest include financial services & e-commerce, search/social/mobile platforms, personal & business productivity, education & language, family & healthcare and web infrastructure.
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The Kima Ventures fund was started in 2010 by entrepreneurs for entrepreneurs. Kimaâ€™s goal is to support and finance innovative companies with seed capital all over the world.
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Andreessen Horowitz is a $2.5 billion venture capital firm that was launched on July 6, 2009. Marc Andreessen, Ben Horowitz, John O’Farrell, Scott Weiss, Jeff Jordan, and Peter Levine are the general partners of the firm.