The Entrepreneurs Backed by Venture Capital Funding
Venture capital funding in the tech industry has come to be seen as they key to success. Though, others prefer bootstrapping when starting their business. So who are these venture capital backed business founders?
A study conducted by CB insights has revealed a lot of details about VC backed companies across the country. The focus of the study was on the three largest players in tech startup; New York, California and Massachusetts.
40% of funded companies have two founding members, and they raise 19% more money on average than companies with one or three founders. A common scenario is one founder focuses on the technical and product side of the business, while the other handles more of the business and marketing. A two founder company has the advantage of a greater depth of knowledge, while still keeping decision making simple compared to larger teams.
Founding teams based in California, raise more money than the other two states. On average 67% more than teams in Massachusetts and 59% more than Nee York based teams.
On average, all Asian teams raise:
• 74% more than all white teams
• 82% more than mixed teams
• 207% more than all black teams
Founders According to Race and Gender
Most founders are white males, but on average Asians receive more funding. Massachusetts has a higher percentage of women founders, compared to New York and California.
Median Funding Received by Race:
• Asian Pacific – $4 million
• All White – $2.3 million
• Mixed – $2.2 million
• All Black – $1.3 million
Median Funding Received By Gender:
• All Male – $2.2 million
• All Female $2.2 million
• Mixed $4 million
Age and experience factors
Older age does not automatically translate into more funding. What is rewarded is more experienced founders.
Median funding Received by Age Range:
• 35-44 ($2 million)
• 26-34 ($2.5 million)
• 45-54 ($2.4 million)
• 18-25 ($1.4 million)
Former Titles and Roles
An interesting statistic is the breakdown of the previous job title and job role of founding members.
Former Title Breakdown:
• Other role – 46 %
• Sales & marketing – 13 %
• Product development & management – 12 %
• Engineering – 11 %
• Business Development – 8 %
• Software – 6 %
• Strategy – 4 %
Former Role Breakdown:
• CEO/Founder – 39 %
• Other title – 28 %
• Director – 10 %
• Vice President – 9 %
• Senior Vice President – 5 %
• Manager – 5 %
• Consultant – 4 %
As can be seen there are many factors that determine the ability of an entrepreneur to secure funding. At least for now California is the place to be venture capital chasing startups.