Land of the “Super Founders“— A Data-Driven Approach to Uncover the Secrets of Billion Dollar Startups

I Spent 300 Hours Gathering Data On Billion-Dollar Startups and Here’s 100 Charts You Shouldn’t Miss

Here are 50 things I learned:

The “Super Founders” of Yesterday Create the Billion Dollar Companies of Today

1) Two or Three Is The Most Common Number of Co-founders

2) More than Half of the Founding CEOs Are Over 35 Years Old

3) Founding CTOs/CSOs Have An Even Wider Age Distribution

4) SaaS/Enterprise Founders Are Younger, Health/Pharma Founders Are Older, Consumer Founders Are Not Just Millennials

5) 50% Have Over 10 Years of Work Experience

6) Directly Relevant Industry Experience Does Not Matter; It Matters Even Less For CxOs

7) Almost 60% Are Repeat Entrepreneurs

8) The Repeat Entrepreneurs Founded and Led a Couple of Startups Previously

9) Almost 70% of Repeat Entrepreneurs Had Previously Founded A Successful Company (Let’s Call Them “Super Founders”)

10) Some of the Founding CEOs Had More Than One Successful Prior Exit

11) Bachelors and MBAs Are The Most Common Degrees Among Founding CEOs

12) Half of CxOs Went To Grad School (Mostly Technical)

13) As Many Technical CEOs As Non-Technical CEOs

14) The Founders Had Previously Worked In Tier 1 Companies

15) Google, Oracle, and IBM Are the Biggest Billion Dollar Founder Producers

16) Previous Work Experience in Other Startups (Not Founded By Themselves) Does Not Matter

17) Stanford, Harvard, and MIT, But Also Some Lesser Expected Universities

18) This Is For Fun. A lot of Johns, Robs, and Daves

Obviously, these names constitute just 20% of all founders. 80% are other less repeated names.

Industry/Sector

19) Most Common Themes: Cloud, Data, Mobile, Marketplace

20) Software Is Eating the World, But Not All of It

21) Social, E-Commerce, Network, Database, Biotech, Automation Are The Largest Sub-Sectors

22) Biotech Companies Go Public Fast, FinTech and Software Companies Stay Private For Longer

23) Cancer, Ride-sharing, Lending, and Autonomous Vehicles Were The Buzzwords

Business

24) 2000 And 2008 Crashes Did Have An Adverse Effect — Also 2017 Was An Exception

25) Many Companies Did Not Have Much Engineering Complexity, And a Disproportionately High Number Were Deep Tech

26) Similar Number of B2B and B2C Companies, Very Few Doing Both

27) If You Can Raise the Money, High CapEx Companies Work Too!

28) 2008–9 Was Peak of Enterprise, 2011–12 Was Peak Of Consumer

29) Over 50% Were Competing With Multiple Incumbents At the Time of Founding

30) Engineering and Network Effects Are The Most Defensible

31) The Product Matters! Most Startups Had Very High Differentiation in Their Core Product Offering With Competitors

32) The Market Was Already Large At The Time Of Founding

33) In Over 65% of Cases, Their Aim Was to Get Market Share From Others, Not To Create A New Market

34) It’s Hard to Crack The Secret To Timing! You Can Be First, Among the First, Or Last!

35) You Need to Be A Pain Killer, But Vitamin Pills Work Too!

36) Save Time, Save Money, Or Make Things Easier

37) California is By Far Home To the Highest Number, Followed by New York and Massachusetts

Funding

38) Almost 90% of These Companies Did Not Go Through Any Accelerator Program. Of the Rest, YCombinator Is №1

39) Over 90% Are VC-Funded

40) Tech Companies Have Mostly Raised ~$250M, Pharma/Health Companies Have Raised ~$400M

41) 2009 and 2012 Seed Rounds Produced The Highest Number of Billion Dollar Companies

42) The Valuations Follow The Power Law. Over 50% Between $1-$2Bn

43) Tier-1 VCs See The Best Deals, Get The Highest Returns

44) Ex-founders Make the Best Angel Investors

45) Early Stage Investing Is Hard

46) Late Stage Funds Get Into More Billion Dollar Companies

47) They Raised Money Quickly, and Kept Raising Quickly

48) They Were Large and Expensive Deals From The Very First Round

49) Tech Unicorns Became a Unicorn Very Fast, In Some Cases In Just Two Years

50) The Seed Round Has Grown From <$0.5M Into Multi-Million Dollar Rounds

Conclusion

1- Yesterday’s “Super Founders” (at least one previous exit over $50M or $10M+ annual revenue) create billion dollar companies of today.

2- For founders, overall work experience matters, directly relevant industry experience matters much less.

3- These startups were disproportionately built in markets that were already huge and the large majority didn’t create a new demand.

4- Competition is good, or at least not an extinction risk; the super-majority of these startups competed with multiple large incumbents at the time of founding.

5- Product differentiation matters a lot; these companies had very high differentiation in their core product/offering versus what was out there.

Founder turned VC — Partner at DCVC. Author of "Super Founders". Spent 4 years collecting the largest dataset on startups. Order on Amazon.

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