A standard rule of thumb for startup selection processes in Latin America is 100/10/1. Out of every 100 startups reviewed, 10 are selected for further evaluation and 1 receives financing. These ratios can be observed across the capital stack – from accelerator programs to later stage venture capital funds.
Real life examples:
- Seedstars Lima Regional Summit reviewed 95 startups and out of 30 startups that made the first cut, 8 were selected as finalists. Only one startup, ManzanaVerde, was selected as best startup.
- MassChallenge Mexico selected 35 out of 745 startups across the region. Out of these startups, only one will receive equity free funding.
- 500 Startups LatAm batch ten recently invested in 11 startups out of over 1,000 applications
From a founder’s perspective, this means you will hear “no” a lot, as Andres Benavides wrote. But, having these ratios in mind can help you strategize.
Know where you are in the funnel and act accordingly. Work to get to from 100 to 10, and then from 10 to 1.
First, get from 100 to 10:
- Take a long term strategy. Applying this year can increase your chance of acceptance in future years
- Apply to programs whose purpose and selection criteria match well with your startup
- Use current relationships and investors to provide warm intros
- Ask where you are in each stage of the process and next steps to gauge probabilities
Next, get from 10 to 1:
- Get into selection round/due diligence with a few potential programs and investors in parallel
- Refine you pitch and get ready to present to an investment committee or panel of judges
- Be responsive to requests for further information
- Have a reference list ready for current investors or clients
- Reach out to current portfolio companies to inquire about the program or fund
- Be proactive in showing interest and sharing how you will get the most out of the program or what you hope to add to the accelerator batch or fund portfolio
If it doesn’t work out, apply again next cycle. Your startup will be in a much different (and better!) place than 12 months ago. If you can show progress between cycles it will do wonders to getting from 100 to 1!