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August winners and venture studio hitrates
What do the most successful studios and startups have in common?
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We scraped the employee headcounts of ~1,750 venture studio startups at the beginning of August and the beginning of September to identify the ones growing the fastest, and learn what they have in common.
Headcount growth across all studio startups was +1% in August, slowing from +2% in July
The fastest growing startups were in biotech, healthcare, cybersecurity, labor marketplaces and homebuilding
These are crowded VC categories, and several studio startups with shrinking headcounts also fell into these themes
The startups growing in August were launched by studios with large in-house teams
Fintech, which had several of the fastest growing startups in July, was no longer a fastest growing theme in August
At least 19 studios demonstrated a very high “hitrate,” with >50% of their startups growing in August
These studios all have large in-house teams (15-120+ people)
Studios are able to demonstrate a high hitrate across differing geographies, end market focus and rate of startups launched
Demonstrating a high hitrate helps a studio recruit founders for their next startups
The following table includes US based startups with at least 50 employees who grew LinkedIn headcount the fastest on a percentage basis in August:
The fastest growing startups in August primarily operate in biotech, healthcare, cybersecurity and labor marketplaces. These themes also saw the largest startup fundraises over the summer.
Demonstrating a high “hitrate,” or ability to consistently launch successful startups, is an important selling point to potential founders.
We estimated hitrate by: (i) finding all the startups for each studio who grew employees in August, (ii) adding any startups who have been acquired or IPOed, and (iii) dividing that sum by the total number of startups launched by that studio.
The studios where the majority of their startups added headcount in August include:
It appears the only requirement for a studio to demonstrate a high hitrate is having a large in-house team between 15 and 120+ employees.
Otherwise, high hitrate studios focus across B2B or B2C (or both), launch startups at different rates and operate across different geographies.
The above data is based on LinkedIn headcount, which is imperfect and incomplete. This analysis may slightly undercount newer studios who have not yet explored exits and also excludes studios who are no longer operating but demonstrated a high hitrate in the past. See the methodology section below for more detail.
For more detail on exits, see: the largest venture studio startup exits.
Methodology and data limitations
In this analysis we used employee counts as a proxy for traction, but this is an imperfect metric. Some startups accelerate hiring ahead of revenue and other startups may be growing revenue quickly but have not accelerated their hiring.
We focused on US only. Limiting to the US makes this apples to apples and excludes studios who (wisely) take proven US business models and roll them out in other countries.
We measured startups / year or startup velocity by taking the number of startups launched since 2017 and dividing by 5.
We focused on private companies and excluded IPOed or acquired ventures. Studios likely exited their stakes in those circumstances.
In the first table, we highlighted the startups who have at least 50 employees and added the most headcount in August on a % basis. LinkedIn headcount data is less reliable sub-50 employees, however, this limitation excludes some recently launched startups with small teams but scaling quickly.
It’s promising that at least 19 different studios have demonstrated an ability to have a hitrate greater than 50%. These studios should be able to continue to attract high quality founders who are excited about a leadership opportunity at a startup that has been significantly derisked. It’s even more promising that these high hitrate studios span a variety of geographies, end markets and operational models.
The only concerning data is the deceleration in headcount across studios startups overall, from +2% in July to +1% in August. This could be due to a seasonally slow hiring month or a temporary setback in funding environment. Still this figure is important to watch in the coming months to assess the health of the industry overall.