Mining the Series A Crunch

Editor’s note:  This is a repost of an article we did for TechCrunch.

Back in November, rumblings of a Series A Crunch took hold and speculation began about the number of seed funded companies destined to close. Fast forward a few months and we are now seeing lists of companies that may be imminent victims of the crunch.  While these are purely speculative, the information can prove valuable for corporate development teams, recruiters, and those in search of interesting IP.  One list announced last week has gone on sale for nearly $5,000!

At CrunchBase, we aim to be the free and open resource of information about companies, people, and investors.  Data about companies, whether they are skyrocketing or struggling, helps us all identify new markets, refine products, find great partners, and generally make better decisions.  Therefor, we are publishing our own list of companies worth watching and it’s free for anyone to download.

Is this a definitive list of companies in trouble?  Absolutely not.  It’s hard to judge a company’s health through public data sources – we don’t know things like burn rate, progress towards a subsequent financing, or imminent acquisitions. Further, many companies have already closed and we simply don’t know. Admittedly we don’t do a great job keeping track of closures.

While not perfect, CrunchBase provides a few indicators worth thinking about and in the interest of being open here’s what we did:

mining_series_a_crunch

  • Start with US companies that closed a seed (or angel) round on or after Jan 1, 2011
  • Exclude companies that have received follow on funding
  • Exclude companies that were acquired
  • Exclude companies without with news or employee updates in last 6 months
  • Exclude companies known to have closed
  • Look at remaining companies where it’s been ~13 months since their last funding

The result is a list of 1,291 companies that you can download (Please see our post on exporting data for more recent information). Remember that all of our data came from CrunchBase and everything is free to explore online. If you like, use our API and run your own analysis.  Our only request is that if you use the data, please attribute it back to us.

Some final notes… We sometimes get things wrong so if your company is in this list and you’ve received follow on funding, gotten acquired, or are just doing great, please let us know. Also, if you have ideas for research that you think would be useful for the entire tech community, send us your ideas.