Age of Unicorn Founders, Founder Salaries, Equity Splits, What Investors Really Want & More
Digesting Insights From the Data
👋 Hi, I’m Andre and welcome to my newsletter Data-driven VC which is all about becoming a better investor with data & AI. Every Tuesday, I publish “Insights” to digest the most relevant startup research & reports. Every Thursday, I publish “Essays” that cover hands-on insights about data-driven innovation & AI in VC, and every Sunday, I publish “Picks” to spotlight the hottest Stealth, Early, and Growth Startups. Follow along to understand how startup investing becomes more data-driven, why it matters, and what it means for you.
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Adding Payments to Your Platform: Is It Worth It?
Tidemark's new industry benchmarking report delves into a key question for Vertical SaaS and SMB technology companies: Should you add payments to your platform? While the potential revenue boost is enticing, the decision isn't straightforward and requires careful consideration of multiple factors:
Platform Stickiness Boost: Integrating a payments product can lead to a 6-7% increase in gross and net retention rates (GRR and NDR), making the platform more "sticky”.
Profitability Variability: The median net take rate for payment products is around 0.8% of gross merchandise value (GMV), meaning a $100 transaction might only yield 80 cents in profit.
Industry-Specific Outcomes: Net take rates differ by sector, with transportation and restaurants seeing higher profitability, while real estate and auto lag behind.
✈️ KEY TAKEAWAYS
Integrating payments can significantly enhance customer retention and revenue, but success hinges on understanding your platform's role in the customer’s workflow and the profitability potential within your specific industry.
Unicorn Founders Tend to Be Younger Than Average Startup Founders
A recent study by Stanford GSB reveals that unicorn founders are typically younger than the average startup founder in the US. This trend contrasts with the broader startup landscape, where older founders are more prevalent.
Young Founders Dominate Unicorns: While only 16% of all US startups are founded by individuals under 30, a notable 35% of unicorn founders fall into this age group.
The 30s Sweet Spot: Founders aged 30 to 39 are well-represented among unicorns, comprising 33% of this group, compared to 27% in all US startups and 26% in high-growth startups.
Older Founders Less Common in Unicorns: Although 56% of US startups are founded by individuals aged 40 and above, only 32% of unicorn founders are in this age range, reflecting a significant disparity.
✈️ KEY TAKEAWAYS
The data suggests that younger founders, particularly those under 30, have a higher likelihood of founding unicorns, indicating that age may play a role in the growth trajectory and potential of a startup.
How Much Should Founders Pay Themselves?
Determining the right salary for founders can be tricky, balancing between living expenses and the need to be frugal with investor cash. As suggested in a recent episode of The Data Minute by Carta founders should pay themselves enough to cover their basic living expenses without indulging or draining resources, since financial stress isn't conducive to building a successful business: