Do More Competitors in a Sector Decrease Fundraising Success?

This post is by Tomasz Tunguz from Tomasz Tunguz

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Over the last 12 years, the number of startups founded has grown each year by 25%, according to Crunchbase data. That’s quite an acceleration each year! See the chart here. As the number of companies in a sector grows, do the odds of successfully raising capital decrease? The chart above shows startup company formation rates, the number of new companies formed each year from 2004-2011 by Crunchbase sector. I didn’t graph the 2012 or 2013 data because the Crunchbase team told me the data sets need about 2 years to mature.

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