StartupNation releases "Success" calculator

Matt Bowman · June 10, 2009 · Short URL:

The free online assessment gives business owners a glimpse into their future.

 The venture capital industry is shrinking, and, if this morning's  report by the Kauffman Foundation is accurate, total VC investment will need to drop to half its current size to produce competitive returns.

That means a lot of startups will be cut off from the VC money tree . So how do you know if you’re company is headed for the compost heap?

To help with the prognosis, StartupNation, a site that offers advice and networking for entrepreneurs, released today what it’s calling the “Odds of Success Calculator.” Just plug in answers to eight questions, and the calculator will tell you your chances of survival.

In some ways, it's similar to YouNoodle Scores, a feature on YouNoodle that is a quantitative measurement of a startup's impact and importance based on buzz, traction and activity.

Based on data gathered by EquityNet, which develops software for risk analysis of private businesses, the StartupNation calculator takes into account eight risk factors: amount of capital invested, difficulty in raising more funds, cash flow status, degree of business planning, target market growth rate, management experience and industry experience.

Eight questions isn't much, and the gimmick probably reveals more about the state of the industry than about the fate any given company (half the Web page is taken up with legal disclaimers). It will likely entice many entrepreneurs, who’ll be automatically opting in to receive emails from Startup Nation.

Not a bad way to build your marketing list. The calcluator is sponsored by VerticalResponse, a provider of on-demand email marketing, online surveys, and direct mail solutions for small business.

It may also draw business to EquityNet, which touts a proprietary Risk Quantification System that analyzes 30 important business variables like sector and industry age and compares them to data about the fate of one-time startups to generate a more robust probability of success.

The calculator probably won’t tell entrepreneurs too much they didn’t already know, but encouraging CEOs to take a hard look at their risk factors may not be such a bad idea. As the VC-powered industry gets ready for a pruning, entrepreneurs will want to know what side of the shears they're likely to be on.

Support VatorNews by Donating

Read more from our "Trends and news" series

More episodes