Back in December, the sort-of-Series-A-crunch led VC analysis firm CB Insights to predict that more than 1,000 startups will be orphaned at the seed stage. But it seems there is silver-lining to the seed boom/cash crunch — at least for CB Insights itself, which is selling a list of “dying” startups. Or to give it its full title a List of Early-Stage Tech Startups Running Out of Cash (Dying). The price-tag for the list? Almost $5,000.
How is CB Insights determining that an early stage startup is running out of runway? The unlucky number is apparently 13 (or more) months since the startup raised its last round. “This list highlights seed and angel-backed technology startups whose last round of financing was more than 13 months ago and thus who may be running out of runway (aka cash) or for lack of a better phrase – may be dying,” the firm notes.
It’s unclear how many startups have made this ‘deadpool dive’ list (presumably it could be more than 1,000, if CB Insights’ past analysis is on the money). Or who exactly is on the list — CB Insights says only that “tech startups on this list span internet, mobile and software companies”. We’ve asked to see the full list but since we’re not a paying customer we’re setting our expectations accordingly.
Paying customers can expect the following data on each listed startup:
- Name of company
- Website
- Company description
- Industry classification
- Mailing Address
- Phone number
- Total amount of money raised
- Date of most recent financing
- Amount of most recent financing
- Investors
It’s also unclear where CB Insights is sourcing its startup financing data from. It would be possible to pull public financing data from CrunchBase, for instance, but there are lots of problem with using only public data (if that’s what CB Insights is doing) to judge whether a startup is ailing since not all rounds are disclosed in full or disclosed promptly. Add to that runways vary because of’ varying monthly expenditure, and funding can be done in tranches based on set milestones. In short: there are lots of variables so public funding data can present a misleading picture of the health (or otherwise) of a startup.
Of course it’s possible CB Insights has been contacting startups itself to track their financing and is therefore privy to private financing data which it’s using to compile the list. We’ve asked about their methodology and will update this story with any response.
Who wants to buy a list of possibly moribund startups? A varied group, according to CB Insights, including companies looking to do acqui-hires, VC investors on talent recruitment duty, HR teams generally and companies wanting to cherry pick ailing startups’ IP. CB Insights says the following customers have “asked us for/purchased this file already”:
- M&A groups looking to do acqui-hires
- Venture capital investors looking to help portfolio companies recruit talent
- Company HR/recruiting teams that are looking to find talent including hedge funds and more mature later stage technology companies
- Organizations interested in the potential IP that these startups may possess
