D.C.'s startup community is missing out on early stage funding opportunities, according to Fosterly's 2016 Regional Startup Census, which was released Friday.
Based on responses gathered from the region's startup community, founders are more likely to raise small "friends and family" angel rounds under $50,000 (67 percent reportedly have received at least $500,000 in outside funding), but as that amount climbs towards the first million, fewer report success. Only 3 percent report raising between $500,000 and $1 million, and 5 percent report raising between $1 and $2 million. It is important to note that the trend could be the result of a total 25 percent of participating startups reporting they launched in the last year alone, though.
However, that problem is limited to the early stages. As the amount being raised increases, the number of founders who have closed a funding round rises with it—with 18 percent reporting that they've raised between $1 million and $5 million or greater.
Fosterly, run by Adam Zuckerman and designed to provide resources to connect entrepreneurs in the area, released the results of its 2016 Regional Startup Census Friday. The startup announced the census project back in November and solicited voluntarily given information from the DMV area's startups. Between Nov. 1 and Dec. 2, the census received 217 responses.
Outside of this funding drop, the rest of the results are to be expected for those of us in D.C. tech's community. About 10 percent of participating startups identify as a computer software company, the highest concentration the startups identified with. About 77 percent of revenue for startups in the census came from private sector deals, and only 23 percent came from public sector companies (Now, I can see how that can be shocking, but take a minute and think of all the B2B companies who call the D.C. metro area home).
"The more diverse our tax base is, the less dependent on revenue from government contracts, the more resilient it is. Resilience drives sustainable growth," the report says about D.C. startups preference for private sector revenue.
However, the census results might confirm what many suspected: D.C. startups scene is in an early-stage growth phase overall. About 35 percent of startups that responded said they were founded in the last 2-3 years, and 25 percent of participating startups were founded in the last year. That's well over half of all participating startups with a lifespan shorter than one presidential term.
But there's no way to cover everything Fosterly's census covered in one fell swoop. So, here are a few key findings...
- 31 percent of participating startups have at least one female founder.
- 48 percent of participating startups say they're majority women or minority owned.
- The number of founders who reported being born in another country (13.9 percent) is almost equal to the number that identified as native to D.C.
- 9 percent of founders reportedly attended the University of Maryland
- 9.7 percent of startups have participated in 1776's program
To dig through the report yourself, head to Fosterly's site.
Image used via CC BY 2.0 — credit Heisenberg Media
