There are startup companies and then there are startups that reach what Ned Renzi calls escape velocity.
It doesn’t happen often: About half of all new businesses flame out within four years, according to Los Angeles-based data analytics outfit Statistic Brain Research Institute. And Mr. Renzi said about a third of startups just break even after five years.
But Mr. Renzi, founding partner at Strip District-based seed funding outfit Birchmere Ventures, is looking for the small number of startups that undergo torrid growth — exploding by a factor of 20 in five years to reach $100 million (£81.43 million) in revenue. It’s a steep climb. Among 30 companies in an investment portfolio, for example, only four or five might light up the sky, he said.
“It rarely happens, but when it does, you have magic,” said the 51-year-old Somerset County native. “These are metrics that could get you funded.”