👋 Hi, I’m Andre and welcome to my weekly newsletter, Data-driven VC. Every Tuesday, I publish “Insights” to digest the most relevant startup research & reports, and every Thursday, I publish “Essays” that cover hands-on insights about data-driven innovation & AI in VC. Follow along to understand how startup investing becomes more data-driven, why it matters, and what it means for you.
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Welcome to another “INSIGHTS” episode where we cover the most interesting startup research & reports from the previous two weeks.
We read all reports, studies, and papers about startups and the wider ecosystem, and condense the most important insights for you.
The only source you need to keep up with data-driven startup insights.
Ivy League to Silicon Valley: Mapping the Unicorn Founder Trail
In the quest to uncover the graduate programs most likely to produce unicorn founders, a new analysis by Ilia Strebulaev reveals intriguing insights into the academic origins of these rare business leaders. This study not only highlights the elite institutions that have become hotbeds for innovative entrepreneurship but also underscores the nuanced landscape of higher education's impact on the startup ecosystem.
Yale University stands out with an 80% higher likelihood than the average of producing unicorn founders, leading the rankings.
Stanford University and MIT tie for second, each offering a 40% increased chance of alumni becoming unicorn founders, showcasing their significant influence in the tech and business worlds.
Columbia University and NYU round out the top spots with a 30% higher likelihood, indicating their roles in fostering entrepreneurial success.
✈️ KEY TAKEAWAY
Yale, Stanford, and MIT remain the clear leaders in producing unicorn founders in the US. Their odds are substantially higher than those of other universities.
Decoding Round Dilution: How Much Equity Should You Sell?
20-30%, this is the typical answer when asking investors for standard round dilutions in Seed or Series A. In reality, however, round dilutions depend on a range of factors. Peter Walker at Carta analyzed data from 17k primary rounds since 2020 and sheds light on the evolving dynamics of equity distribution from seed to later stages, amid a backdrop of inventive financing strategies.
Priced Seed Rounds saw a median dilution of 20.6% in 2023, indicating a slight decrease from 2020, yet remaining steady from the previous year.
Series A Rounds experienced a median dilution of 20.1% in 2023, continuing a subtle downward trend observed over the last four years.
Series B Rounds recorded a median dilution of 17.6% in 2023, a slight increase from 17.1% in 2022, suggesting a nuanced shift in founder-investor equity agreements at this stage.
Series C and D Rounds show more significant founder retention of equity, with medians of 13.4% and 11.5% respectively in 2023, pointing to a strategic consolidation of ownership as companies mature.
✈️ KEY TAKEAWAY
While there is quite a bit of variance in how much equity is sold each round there are best practice numbers that will help you navigate future funding rounds.
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