What does it take to be a startup that raises huge sums quickly?

What does it take to be a startup that raises huge sums quickly?
From TechCrunch - February 24, 2018

Some founders toil for years to secure a meager seed round. Others seem to go from launch to a massive fundraise in no time. Why is that, and how does one get into that second group?

Theres no single formula, of course. But data indicates it helps to be famous, involved in a hot technology sector or working to cure cancer.

Those are the findings from a Crunchbase News analysis of the fastest growing North American startups by capital raised. Our dataset included companies founded in 2015 or later that have raised $100 million or more in venture funding to date. We looked for patterns that could shed some light on why some startups are able to take off so quickly.

These fast growers constitute a fairly small club. Ourlistincludes just 39 companies, after culling some corporate spin-outs.

The top companies span a broad variety of sectors, from autonomous driving to insurance tech to cancer immunotherapy. And although its a varied group, we did see some commonalities.

So, if youre hoping to raise $100 million in less than three years, here are some top traits shared by companies that have recently reached that milestone.

Trait No. 1: Focus on cancer immunotherapy

Cancer immunotherapy has been a hot startup investment space for a number of years now. Over that time, companies in the fieldwhich develop therapies to corral the bodys own immune system to destroy cancer cellshave generated both enormous returns and remarkable clinical trial results.

That progress shows little sign of slowing, which may be why its the most highly favored field in the Crunchbase fast-growing companies list. We identified at least seven companies in the space Tmunity Therapeutics,Neon Therapeutics,Gritstone Oncology,Forty Seven,Arcus BiosciencesandFLX Bio that have raised $100 million or more in less than three years (another, Celularity is focused broadly on placental stem cell therapies, with some immuno-oncology applications).

Beyond immunotherapy, we found that the fight against cancer accounts for about a quarter of fast growers. Funding for the space comes primarily from traditional venture firms, but we also see corporate and philanthropic investors in the mix.

There also are big exits to be had. Last month, for instance, immunotherapy pioneer Juno Therapeutics sold to pharma giant Celgene in a deal valued at $9 billion. Five years earlier, Seattle-based Juno launched as a venture-backed startup; it went public less than two years later with a multi-billion-dollar valuation.

Trait No. 2: Have a well-known founder

If you want to raise a lot of money, it helps to look like you dont need it.

Often, the companies that raise huge sums quickly have well-known, previously successful entrepreneur founders. Two examples from this past month are Katerra and Celularity.

Katerra, which is aiming to disrupt the industry, raised a staggering $865 million in aSoftBank-led round last month. It helps that the companys co-founder, Michael Marks, was formerly longstanding CEO of Flex (previously Flextronics), one of the largest global electronics manufacturers. Another co-founder is Jim Davison, who earlier launched Silver Lake, the largest technology buyouts firm.

Essential, the mobile phone and device startup led by Andy Rubin, creator of the Android operating system, is another case in point. Rubins track record with Android certainly contributed to the companys ability to raise $330 million in less than two years of operation.

Trait No. 3: Have expertise in self-driving cars

Trait #4: Structure as a biotech platform company

Trait #5: Get to know ARCH Venture Partners, SoftBank and Celgene

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