Following my post last night about our effort to use CrunchBase in more ways on TechCrunch, some readers have shared how they’re already using it. One was Dirk Neumann from “social supercomputer” startup Opani, which provides tools to help people more easily analyze large data sets.
He’s used CrunchBase data to try to come up with a formula for pricing talent in startup acquisitions. His analysis, below, is in response to a recent panel at law firm Orrick, where a number of acquisition heads at major tech companies had noted that there was “no general formula” for doing so.
He identified 71 early-stage acquisitions and 84 late-stage acquisitions in CrunchBase, then further defined the early stage group as startups purchased for below $66 million, with fewer than 50 employees, and investments of less than $5 million. Later-stage companies were defined as having acquisition prices above $66 million and between 50 and 500 employees. The findings are a bit rough, but here they are:
An early-stage startup costs $8.5 million plus $0.5 million per employee. But, you can see that the graph above shows all sorts of outliers, like Grand Central’s giant deal, that confuse the picture. The variation isn’t too surprising when you consider that many early-stage acquisitions are done based on the acquirer having very high hopes for the team and the product being bought.
He also found that the average late-stage startup costs $135 million plus $0.5 million per employee. The graph is far more normal looking. And the big payout beyond employees makes sense when you consider the additional capital and product value that the acquirer believes they’re getting.
Do you have more CrunchBase analysis to share? Let me know: eldon (at) techrunch (dot) com.