Recently, I was asked how often new startups are formed from employees that worked together at previous startups. Good question. Most startups emerge from an entrepreneur encountering an unmet need or opportunity in the market, often informed by their previous job. While I don’t have hard stats, I do have anecdotes from local startups.
Two high-growth startups in town are Terminus and Salesloft. Terminus does multi-channel account-based marketing, has 363 employees listed on LinkedIn, and has raised $120M according to Crunchbase. Salesloft does sales engagement software, has 726 employees listed on LinkedIn, and has raised $246M according to Crunchbase.
From these two pre-IPO stage startups, I know of at least four startups that were started by alumni:
- Tourial – Self-guided product experiences
- Sonar – Tech stack monitoring
- Spaceship – Continuous delivery platform
- OrderNerd – Restaurant online order management
These startups emerged over the last few years, and the number of startup spinoffs is obviously not static as there are likely more. Let’s call it four startup spinoffs from a combined 1,000 employees, making it one spinoff for every 250 employees.
Startup success begets more startup success, and for every 250 startup employees, look for a new startup spinoff to emerge.