What Does It Take To Make Your Startup A Success? A Young, Female, Ivy Leaguer with a Co-Founder
For every successful startup, there are countless others that don’t ever quite break through. As such, predicting success accurately can reap huge rewards – for both investors and for those who attempt to find patterns and algorithms to do the same.
The latest report to emerge exploring traits of successful startups comes today from First Round Capital, which released their findings based on the 300 companies they’ve invested in over the course of the past 10 years. First Round made their name backing startups like Warby Paker, One Kings Lane and Uber, the current obsession of tech writers and investors alike. The results – which First Round broke down into ten lessons – use how much a startup’s value has changed between the firm’s initial investment and their fair market value today.
As described by The Wall Street Journal, First Round’s 10 Year Project states that their biggest successes shared several characteristics, first and foremost that they have founders who’ve attended an Ivy League school (and a handful of other top institutions, like MIT and Stanford). First Round discovered that founders with that elite education lead their startups to perform 220% better than competitors with less prestigious diplomas.
Additionally, female founders perform 63% better than their male peers, and, while the average age of First Round founders is 32, founders under the age of 25 before 30% better. The halo effect from companies like Amazon, Apple, Facebook and Google is also real: founding teams with experience at one of the big four, plus Twitter and Microsoft, performed 160% better than others without those companies on their resume.
And despite the cutthroat atmosphere in the land of investments, First Round did find one common thread that counts as a win for collaboration: teams with more than one founder outperformed founders who do it alone by 163%. Startups with one founder also had valuations average 25% less than those built by a team.
Per the Journal, “First Round acknowledges that its data isn’t necessarily representative of the industry. Instead, the firm hopes it ‘can provide some interesting directional insight.'”
But, for a firm with Uber and Warby Parker on their roster, it could very well be insight worth considering.
To see the other lessons culled from First Round’s data analysis, visit the 10 Year Project microsite.
