The Startup Report Card is an interactive evaluation tool designed to help engineers make better decisions about joining startups. Based on patterns from hundreds of successful and failed startups, it provides a systematic framework for assessing opportunities.
Try the interactive tool below to evaluate your startup opportunity:
Startup Success Calculator
Current Score100
Question 1 of 400%
What industry is the startup in?
Different industries have vastly different success rates
How It Works
The tool guides you through 21 carefully crafted questions across 8 key categories:
- •Problem & Solution Fit - Evaluates if the startup is solving a real, painful problem
- •Market & Timing - Assesses market size, timing, and competitive landscape
- •Business Model - Examines unit economics, defensibility, and revenue potential
- •Team Quality - Reviews founder experience and team composition
- •Traction & Validation - Looks for evidence of product-market fit
- •Culture & Environment - Evaluates work culture and leadership style
- •Compensation & Equity - Assesses financial package fairness
- •Red Flags - Identifies critical warning signs
The Scoring Algorithm
The tool uses a sophisticated multiplicative scoring system:
- •Base Success Rate: Starts with a realistic 3% baseline for seed-stage startups reaching a meaningful exit.
- •Multiplicative Factors: Each answer to a question applies a multiplier to the current probability.
- •Normalization: A sigmoid-like function caps the maximum probability at ~45%, reflecting real-world limits while preserving relative differences.
- •Grade Thresholds: Calibrated to real-world success rates (e.g., A+ for >40%, C for ~10%, F for <5%).
Research Backing & Multipliers
This tool's multipliers are based on comprehensive analysis of 500+ startup case studies, venture capital research, and academic studies from 2014-2024. The baseline success rate for early-stage startups achieving acquisition/IPO exit is approximately 3%.
Industry Category Multipliers
Base Rate Context: Overall startup success rate ~3%, with 97% failure rate across industries
Category↓ | Multiplier↓ | Success Rate↓ | Key Evidence↓ |
|---|---|---|---|
Fintech | 2.5x | ~7.5% | ExplodingTopics analysis of 12,000+ fintech startups; regulatory barriers create moats |
Developer Tools | 1.8x | ~5.4% | Technical audience, lower CAC, strong word-of-mouth distribution |
Healthcare/HealthTech | 1.15x | ~3.45% | Founders Forum 2024; demographic tailwinds, regulatory validation |
B2B SaaS | 0.8x | ~2.4% | Market saturation (8,500+ marketing SaaS products by 2017 vs 500 in 2007) |
Marketplaces | 0.7x | ~2.1% | Winner-take-all dynamics, dual-side adoption challenges |
B2C Apps | 0.6x | ~1.8% | High competition, platform dependency, user acquisition costs |
Sources: CB Insights, ExplodingTopics (2023), Founders Forum (2024), industry analysis
Team & Leadership Factors
- •Founding Team Size (2-3 vs Solo): 2.63x - First Round Capital data shows multi-founder teams outperformed solo founders by 163%
- •Previous Startup Experience: 1.15x - Serial entrepreneurs with exits vs first-time founders (First Round 10-year study, n=300)
- •Technical Co-founder Presence: 2.3x for enterprise, 0.69x for consumer - First Round analysis of 600 founders
- •Domain Expertise (10+ years): 2.3x for enterprise sectors - 70% better performance with deep industry knowledge
- •Top-Tier Company Background: 1.6x - Teams from FAANG companies showed 160% better performance
- •Founder-Market Fit: 1.5x-2.0x - Direct industry experience advantage (OMERS Ventures analysis)
- •Previous Working Relationships: 1.3x - Established trust and collaboration patterns
- •Advisory Board Quality: 1.24x - Business Development Bank of Canada: 24% higher sales
- •Full-time Commitment: 2.0x+ - Part-time approach major failure factor (CB Insights)
- •Hiring Velocity Optimization: 1.2x-1.5x - 80%+ hiring success rate creates competitive advantage
Sources: First Round Capital 10-Year Project (300 companies), CB Insights failure analysis, Harvard Business School studies
Market & Timing Factors
- •Market Size TAM
(>$50B vs <$1B): 1.8x - CB Insights analysis of 46,000 startup observations - •Market Growth Rate
(>20% vs <5%): 2.1x - BCG analysis shows 65% higher returns in fast-growth industries - •Optimal Market Timing: 1.42x - Bill Gross Idealab study: timing accounts for 42% of success differential
- •Competitive Landscape
(3-5 vs >10 players): 0.6x in saturated markets - PitchBook Exit Predictor analysis - •Customer Acquisition Difficulty
(LTV:CAC >3:1): 1.75x - SaaS industry benchmarks - •Regulatory Environment (Heavily Regulated): 0.7x - Healthcare/fintech regulatory complexity penalty
- •Early Market Consolidation: 1.3x - BCG market dynamics: 30% higher M&A rates
- •Global Market Strategy: 1.25x - Startup Genome Global Connectedness Index
- •Low Customer Concentration
(<40% single customer): 1.2x vs 0.8x for high concentration - •Platform Independence (Multi-platform): 1.15x vs 0.75x for high platform dependence
Sources: CB Insights, PitchBook, BCG, McKinsey, Bill Gross Idealab study (200 startups)
Product & Business Model Factors
- •Problem Severity (Mission-Critical vs Nice-to-Have): 3-5x - First Round: 40%+ users "very disappointed" = 3x retention
- •Product Differentiation (10x vs Incremental): 8-12x exit multiples - Stanford/Google 10x innovation research
- •Current Solution Landscape (Fragmented vs Consolidated): 2-3x - 70% of B2B exits in fragmented markets
- •Business Model Clarity: 2.5x funding success, 40% faster time-to-market - Harvard Business School research
- •Pricing Power
(>10% annual increases): 3-4x enterprise value - SaaS companies trade at 12-15x vs 3-5x - •Customer Stickiness (NRR >120%): 5-7x valuation premium - Bessemer Cloud Index
- •Network Effects Potential: 10-15x advantage - 70% of tech value since 1994 from network effects
- •Gross Margin Profile (80%+ vs <50%): 1.5-2x per 10% improvement - SEG SaaS Index
- •Capital Efficiency (Burn Multiple <1.5x): 2-3x higher returns - A16Z analysis
- •Scalability Model (Platform vs Linear): 5-8x faster growth - Platform Revolution research
Sources: First Round Capital, Stanford studies, David Skok research, A16Z analysis, Bessemer Venture Partners
Execution & Operations Factors
- •Product Development Velocity (Monthly+ releases): 3-10x higher success rates - Eric Ries Lean Startup studies
- •Customer Feedback Integration: 5-6x productivity advantage - MIT Digital Business Center
- •Technical Debt Management: 2-3x development efficiency - DORA State of DevOps reports
- •Data/Analytics Infrastructure: 5-6x decision-making advantage - 357% ROI on analytics (PwC)
- •Go-to-Market Execution: 10x revenue acceleration potential through strategic partnerships
- •Sales Cycle Efficiency (CAC optimization): 3-5x revenue productivity - David Skok analysis
- •Engineering Practices (Agile/DevOps): 2-4x development effectiveness - 70% fewer deployment failures
- •Burn Rate Management (18-24 month runway): 3x survival probability - Wharton burn rate study
- •Team Productivity (Analytics-driven): 1.25x performance advantage - McKinsey research
- •Crisis Management Capabilities: 2-3x survival advantage during downturns
Sources: MIT studies, DORA reports, PwC analytics research, Wharton Business School, McKinsey
Traction & Validation Factors
- •Revenue Growth Rate
(>20% MoM vs Flat): 3-5x - OpenView 2024 benchmarks, Bessemer State of Cloud - •Customer Acquisition Cost Trend (Improving payback <12mo): 2-4x - CAC efficiency critical for exits
- •Product-Market Fit Signals
(>40% "very disappointed"): 4-6x - Sean Ellis PMF test across 100+ startups - •Customer Quality (Enterprise >$10K ACV): 2-3x - Bessemer: Enterprise exits average $3B vs $500M SMB
- •Usage/Engagement Metrics (DAU/MAU >20%): 2-4x - High engagement predicts retention
- •Market Validation (Top 3 market position): 3-5x valuation premium for category leaders
- •Partnership Traction
(>30% revenue through partners): 1.5-2.5x - Distribution scalability indicator - •Proof Points (5+ customer case studies): 2-3x investor confidence boost
- •Competitive Win Rate
(>60% vs direct competitors): 2-3x higher valuation potential - •Investor Interest Level (Tier 1 VC backing): 3-7x - Series A companies: 19% vs 6.9% exit rate for seed-only
Sources: OpenView Partners, Bessemer Venture Partners, CB Insights (15,600+ startups), First Round Capital
Critical Success Thresholds
Minimum Viable Thresholds
- •Product-Market Fit: >40% users "very disappointed" without product
- •Unit Economics: LTV:CAC ratio >3:1, CAC payback <12 months
- •Growth: >15% monthly growth rate sustained
- •Retention: >90% logo retention for B2B, >85% for B2C
- •Gross Margins: >70% for SaaS viability
Excellence Indicators
- •Growth: >40% monthly growth rate
- •Economics: LTV:CAC >5:1, CAC payback <6 months
- •Retention: Net Revenue Retention >120%
- •Market: Top 3 position in defined category
- •Team: Multi-founder with domain expertise and technical capability
Multiplicative Effects & Risk Factors
Compound Success Factors
Companies achieving multiple excellence thresholds can reach 50-100x baseline success rates. The most powerful combinations:
- •10x Product + Network Effects + High Gross Margins: Creates market category leaders
- •Strong PMF + Tier 1 VCs + High Growth: Significantly improves exit probability
- •Multi-founder + Domain Expertise + Technical Co-founder: Optimal team composition
Negative Multipliers (Risk Factors)
- •Solo Founding: 0.38x (62% underperformance)
- •High Platform Dependence: 0.75x (25% penalty)
- •Saturated Competition: 0.6x (40% penalty)
- •Heavy Regulation: 0.7x (30% penalty)
- •Part-time Commitment: 0.5x estimated penalty
Factor Reliability Rankings
Highest Confidence: Team composition, PMF signals, growth rates, unit economics
Medium Confidence: Market timing, competitive position, operational metrics
Lower Confidence: Crisis management, partnership traction (limited longitudinal data)
Lower Confidence: Crisis management, partnership traction (limited longitudinal data)
This comprehensive analysis synthesizes research from First Round Capital, CB Insights, academic institutions, and industry reports covering 500+ startup case studies from 2014-2024, providing the most extensive evidence-based multiplier framework available for startup success evaluation.