The fastest growing venture studio startups
What do breakout startups have in common?
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I wanted to learn what are the breakout venture studio startups, so I scraped the employee counts of 1,000+ startups at the beginning of July and the beginning of August and found the startups growing most quickly:
The data
Keys to success
Fastest growing startups align with major VC funding themes. Of the 1,714 studio startups in my database, the ones growing fastest line up with common VC categories like cybersecurity, fintech, healthcare, proptech and talent. VCs favor large markets ripe for disruption. Greater investor appetite means greater access to capital and more hiring. Where VCs have too many dollars chasing too few companies, a good strategy is to build them more companies.
The worst performing startups also fall along VC themes. The companies who are losing employees (not shown) also appear in many of the same categories like AI, biotech, talent and telehealth. The flipside to more capital is more competition.
Most are in byzantine industries that are difficult for new startups to sell into. By creating relationships with CISOs, regulators, banks, drug companies, etc - studios can guarantee initial traction for their startups and build a moat against other startup entrants.
Most are B2B. Easier to get certainty around end buyers and leverage deep industry relationships discussed above.
The biggest studios teams with the largest funds are producing the largest winners.
Methodology and data limitations
Startup and studio data comes from my database of venture studios and their startups. See data methodology and limitations for more background.
I 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.
I 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.
I focused on private companies and excluded IPOed or acquired ventures. Studios likely exited their stakes in those circumstances.
I highlighted the startups who were fastest growing both in terms of adding the most total employees and growing their employee bases the largest from a % basis.
Conclusion
Across my entire database, the average studio startup grew employees by 3% in July - very healthy growth amidst a tech recession. Studios with the fastest growing startups tend to have large operations and focus on byzantine, often regulated industries that are difficult for typical new companies to penetrate. Finally, the winning studios appear to launch companies in industries where there’s an ample supply of VC capital.
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