How to make a startup successful: Five lessons from venture capital firm First Round
Ever wondered what traits successful entrepreneurs have in common?
Three startups are founded every second across the world, as hopeful entrepreneurs take a stab at their dream venture.
The dream will be short-lived for most, however, as 90 per cent inevitably fail. It’s a risky business, and there may not yet be a way to guarantee success, but perhaps there are some lessons to be gleaned from statistics released by US venture capital firm First Round.
The firm has crunched the numbers on the 300 companies it has invested in over the past ten years, comparing market value at the time of investment with today, and has found some common traits.
We believe that seed investing is much more an art than a science — and there’s no such thing as a formula for success — but analyzing this unique data set of 300 companies and nearly 600 founders turned out to be a fascinating exercise.
Their findings make happy readers for women and young entrepreneurs, as these founders seem to be outperforming older, male rivals by a significant degree.
1. Women perform better
Companies with a female founder do 63 per cent better than all-male teams.
2. Go for it while you’re young
Entrepreneurs under the age of 25 perform 30 per cent above average.
3. Where you went to uni does make a difference
First Round found that startup founders that went to top US schools (Ivy League, MIT, Stanford or Caltech) perform 220 per cent better.
4. Get experience from a tech giant
Teams where founders had worked at Amazon, Apple, Facebook, Google, Microsoft or Twitter before launching their startup performed 160 per cent better.
5. Don’t go it alone
The lone wolf doesn’t do well in the world of startups, as teams with more than one founder were found to perform 163 per cent better than solo founders.