Patterns of Successful Startups, Co-Founder Yes or No, Advisor Equity Benchmark & More
Digesting Insights From the Data
👋 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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This is the first episode of my new “INSIGHTS” series. I’ll publish it every Tuesday and it comes in two alternating formats:
“DIGEST” 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.
“SYNTHESIZE” all available research to create a deep knowledge base for various startup topics such as success criteria, founder backgrounds, hiring playbooks, salary benchmarks, cap table structures, and more. The only source you need to understand any specific startup topic.
Today, we start with DIGEST#1, summarizing the most relevant research from the past weeks and highlighting six clear takeaways.
What Are the Patterns of Successful Startups?
We ran the numbers on 25k+ startups to predict the impact of various team characteristics on the likelihood of raising a follow-on funding round.
Number of executives: 3-6 is best, single founder is worst
CEO: Important to be founder, external CEO is bad
Age: Teams with higher age are more successful; little difference between 25 to early 40s
Education: Master and PhD similarly good, Bachelors and no degree both bad
✈️ KEY TAKEAWAY
Important to differentiate correlation and causation, of course, yet interesting to keep these patterns in mind: Founder CEO, 40+ years old, Master or PhD with 3-6 execs (founders or non-founders) has the highest likelihood of raising follow-on funding. Full study here.
Solo vs. Team: The Startup Founder Debate
In the startup world, the necessity of having a cofounder is often debated. A recent study of 18k+ companies on Carta sheds light on this topic:
Solo founders are more common than you think: They run about 27% of all companies, with a higher prevalence in the Consumer sector. However, this percentage decreases slightly beyond the pre-seed stage.
The biotech industry favors larger teams: Contrary to other sectors, biotech startups tend to have founding teams of three or more members.
Solo founders persist even at advanced stages: Even at the Series D level, 15% of companies are led by solo founders, indicating that single-founder companies can and do thrive long-term.
✈️ KEY TAKEAWAY
This data reveals that success in startups isn't strictly tied to the number of founders, but rather varies across industries and stages. Full analysis here.
Value Capture in Startup Markets: The Missing Middle
A recent study sheds light on a critical "missing middle" – a gap in value capture for startups facing both technological and commercialization challenges: