Universidad Tecnológica de El Salvador
Super Founders
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Super Founders

What Data Reveals About Billion-Dollar Startups

Ali Tamaseb
Public Affairs, 2021
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8

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Mark Zuckerberg, who was a Harvard student when he started Facebook in his college dorm, is a famous outlier among founders of $1 billion companies. On average, says venture capitalist Ali Tamaseb’s data-based report, those who launched billion-dollar firms from 2005 to 2018 had 11 years of experience as executives or entrepreneurs. However, fewer than half had prior experience in the industries where their giant companies compete, and they’re as likely to have a background in business management as in technology. Tamaseb reports that most of these billion-dollar start-ups began in Silicon Valley, and they upended existing markets rather than inventing new ones. 

 

Summary

Startups launched from 2005 to 2018 defy the myth that the typical founder of a billion-dollar company is a college dropout with tech skills.

A detailed dataset of more than 200 companies founded from 2005 to 2018 and valued at more than $1 billion reveals that stereotypical assumptions about such startups are wrong. This includes the fallacy that these companies were pioneers in their industries or faced scant competition.

The dataset’s startups exceed a $1 billion valuation in private funding, IPOs or acquisitions. Researchers compared them to a baseline of 200 companies randomly selected from about 20,000 startups that drew funding of $3 million or more in the same period.

Founders start billion-dollar companies at many ages and life stages, though the media focus on young founders. In this date range, solo founders started 20% of billion-dollar companies, while 64% had two or more co-founders. CEOs of billion-dollar companies have backgrounds in both management and technology. 

The stereotypical path to success with a billion-dollar startup portrays...

About the Author

Ali Tamaseb is a partner at DCVC, a venture capital firm in Silicon Valley with more than $2 billion under management and investments in more than ten billion-dollar startups.

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