Speed and scale in capital formation

Accellerators such as YCombinator, TechStars and Seedcamp are proving that a new model in capital and startup formation is emerging. And it works. Just recently Paul Graham has released that current asset value of the YCombinator is 4,7 Bn$, proving that is also financially viable. However how much YCombinator is scalable and replicable in other locations and geographies? Techstars and Seedcamp are proving that this model can work not only in the Silicon Valley, but also in unusual venture capital geographies. The good news is that thanks to the over 300 ‘startup factories’ that have popped up in the past few years, venture capital and startups are flourishing in places such as Boulder Colorado, Austin, Washington DC, Philadelphia, Pittsburg, Seattle, London, Dublin, Copenhagen, Madrid and Athens.

We estimate that accellerators are generating a rate of around 500 startups per year right now and by looking at the Accellerator study data, I believe this should at list double next year. How far can it go in terms of scale and geographical reach? This question will be one of the key ones in the second edition of the study, we are starting to plan.

One thing that clearly emerged from the data is that the current criteria has served well in providing a relevant description of the current US market, the same methodology however has not been able to correctly describe the European one. This is most likely due to two factors:

– Europe – with the exception of Seedcamp – is a couple of years behind in terms of this new segment in capital formation;

– the European ecosystem is smaller, made of several islands loosely connected. Each market has developed its own adaptation of this model, in a very darwinian kind of process

The main challenge of next edition study will be to adapt the methodology to fit reasonably well these differences. Any suggestion and contribution is welcome, the current plan is to issue the study around March 2012.

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