Excelerate Labs is entering its third year, so I’ve decided to look back on the companies from the first two years to see how they’ve fared. Two recent events motivated this investigation.
First, my company announced a major partnership this week with FindTheBest, the data-driven comparison engine created by Kevin O’Connor. Kevin previously founded DoubleClick (sold to Google for $3.1 billion in 2007) and Internet Security Systems (sold to IBM for $1.4 billion in 2006), so he knows a thing or two about creating successful startups. Second, Excelerate Labs recently announced the members of its third class: SpotHero, 71lbs, Cureeo, Fibroblast, frintit, Good Karma Clothing for Kids, Lasso, Orbeus, Pictarine and Whimseybox. With the announcement of the third class, I thought it would be interesting to apply FTB’s spirit of data driven comparison to the largest incubator in the second city.
Let’s start with some top-level statistics. Excelerate Labs has been around as long as 500 Startups, but only half as long as TechStars or YCombinator. Of all of the programs, Excelerate actually provides the least amount of seed funding to its participants. Surprisingly, though, the average funds raised by Excelerate companies tracks very closely with companies coming out of TechStars. YCombinator companies, however, have raised more money, created more jobs and achieved more exits than the alumni of the other three programs combined. Here, take a look:
Based on data analyzed from Crunchbase, it appears that all but three of the companies from Excelerate's first class didn't survive past the first year. It should be noted that this is typical of startup accelerators. The outliers were GiveForward, PVPower, Edulender and FeeFighters. Edulender recently rebranded to AllTuition, and FeeFighters reportedly exited to Groupon. Despite my best efforts, however, I was not able to find any information about the size or terms of the acquisition, so it’s difficult to characterize the transaction one way or another.
As for the second year’s class, some of the companies face very challenging competitors. Goshi, FoodGenius and Introfly all have direct competitors in Silicon Valley that, unfortunately, have a huge advantage in terms of funding and connections. Babbaco, the winner of TechWeek’s 2011 startup competition, faces head to head with The Honest Company, which was co-founded by Jessica Alba and Bryan Lee (whose previous successes include LegalZoom and ShoeDazzle). Of the remaining companies, the ones that have booked the most traction over the last year appear to be Power2Switch and BuzzReferrals.
On balance, Excelerate has been very successful in finding, funding and supporting young Chicago companies. To date, however, there haven’t been any big exits or breakaway successes. It’s important to remember that incubators, like the companies they foster, are ultimately for startups. That means that they need time to find their model and develop traction. But it also means that they need to hit a grand slam every now and then in order to justify the singles, doubles, and occasional strikeouts. Now that the third class is stepping up to the plate, who do you think is going to swing big?
Richard Komaiko is the co-founder of AttorneyFee.com, an angel funded startup seeking to promote transparency around the cost of legal services. He holds a degree in economics from the University of Illinois, and has studied Chinese language and culture at the University of Chicago and the Beijing Institute of Education. He is proficient in English, Mandarin, Spanish, and Hebrew.