Adeo Ressi, founder of the Founder Institute startup incubator, recently told me that FI has hit a big milestone — more than 1,000 (1,003 at the time of our conversation) companies have graduated from the program.
A mind-boggling number of incubators and accelerators have launched in the past few years. That seems doubly true when you remember how few there were when the Founder Institute launched four years ago. By Ressi’s count, FI was one of the first three, following Y Combinator and Tech Stars.
And it has a pretty different model. Instead of targeting twentysomething programmers who have already started working on new companies, Ressi said his team created “a structured process” that would allow people who were working at big companies and “daydreaming” about their own startups to learn about the business and to figure out whether it really made sense to pursue their ideas.
Another distinguishing feature (and a factor in the relative speed with which 1,000 companies have emerged from the program) is the Founder Institute’s approach to geographic expansion — Ressi said it has chapters in 55 cities across 30 countries and six continents, with more to come. He added that in order to launch in a new city, the Founder Institute needs to be satisfied with both the local mentors who have volunteered/been recruited, and with the level of entrepreneurial interest.
But the real measure of an incubator’s success may have less to do with how many startups it launches, and instead how many have successful exits of some sort. Ressi estimated that the total portfolio has an estimated value of $5 billion, which might seem like a big number when there have only been six “liquidity events” (including the acquisitions of Shopalize and Gridblaze). But he noted, “Our best companies are far from selling.” He also said that 89 percent of companies are still operating, and 74 percent of companies are operating at or ahead of their growth plans.
Ressi predicted that those numbers will get even better as FI revamps its curriculum. He said he looks at the curriculum as “a versioning system,” and the institute is currently launching version 3, which responds to changes in the startup landscape in areas like social media.
I also wondered if we’re going to see a consolidation in the number of incubators over the next few years. Ressi responded: “The Founder Institute is in an unsual position, in that we’re not doing it for the money, we’re doing it to be an organization that affects entrepreneurship. With other investors, I don’t believe that they’re all going to find this to be that viable a model, and what you’ll see, I don’t know if it will be consolidation per se, but they’ll decide that, ‘This is too long a game for me to play.’”
Oh, and if you’re wondering how hard it is to get into the Founder Institute, Ressi said it has a global acceptance rate of 14 percent (if you include incomplete applications) or 35 percent (if you only include complete ones). Of those who are accepted, an average of 30 percent will graduate.