by Victor Brittain-Wong
Ten years is a long time. But it offers the opportunity of analysis from data gathered during the decade. It’s amazing what a decade’s worth of data can show.
I recently found out about a community called First Round Community. They have been capturing data about founding teams in their community since they made their very first investment in January 2005 analysing a unique data set of 300 companies and nearly 600 founders.
And after diving into the data and testing various assumptions, these are some of the findings:
- Female Founders Outperform Their Male Peers – investments in companies with at least one female founder were meaningfully outperforming investments in all-male teams. Indeed, companies with a female founder performed 63% better than with all-male founding teams
- Start-up Fortune Favours the Young – Founding teams with an average age under 25 perform nearly 30% above average. And while the average age of all the community founders is 34.5, its top 10 investments the average age was 31.9 (the average age of entrepreneurs’ first start up in the US is 40 and the UK is 47)
- Investors Pay More for Repeat Founders – valuations of repeat founders were 50% higher than first time founders, that is to say the market effectively prices repeat funders higher because they are known quantities
- Solo Founders do Much Worse Than Teams – teams with more than one founder outperformed solo founders by a whopping 163% and solo founders’ seed valuations were 25% less than teams with more than one founder
- The Next Big Thing Can Come from Anywhere – Venture Capitalists have predicated the idea that the best opportunities come through referrals, yet companies discovered through other channels — Twitter, Demo Day, etc. — outperformed referred companies by 58.4%
For further reading: http://10years.firstround.com
I would like to thank Dr Chris Coleridge of Cambridge Judge Business School for bringing this report to my attention.
- Posted by admin
- On 26 February 2017
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