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by meetbryce 2986 days ago
Do we really think our world of venture backed startups is significant enough to directly impact inflation?
1 comments

I've been trying to find a link to this, but I've been told something like 1 in 5 dollars in the US economy is tied into the startup ecosystem. So... I would think so.
That number sounds absurd, either in magnitude or definition, so I wouldn't worry about finding it. You probably just misremembered.

In magnitude, total venture capital invested last year in the US was $84 Bn. Just the top two PE firms combined exceed this number[2]. It's not a 1:1 match but gives you order of magnitude. And that's just PE (since VC is a tiny subset of PE): in the broader financial world, even considering the US alone, these numbers are almost invisible. I have friends who started an investment firm about 10 years ago with an AUM almost as large as the sum of the VC funds (not merely amount invested) -- and I don't even know anybody at the huge players.

In definition? Above is simply investment, what about revenues or headcount? In revenues, merely the top 103 of the F500 add up to almost a trillion USD in revenues last year. By contrast Uber's revenue was 37B and AirBNB was only 2.6 (and neither really count as startups). 37B will get on you the F100, but not high. 2.6 does not.

In terms of headcount it's not even close.

It does look exciting from our perspective, since the giants of industry were each startups at one point in time. But they all took years to really move the needle, by which time they didn't look anything like startups.

[1] https://www.prnewswire.com/news-releases/record-unicorn-fina...

[2] https://en.wikipedia.org/wiki/List_of_private_equity_firms