First Round 10 Year Project
Authors: ['First Round Capital']
Year: 2015
Methodology
- Sample: 300 companies, nearly 600 founders
- Design: longitudinal
- Data: Proprietary internal investment data (2005-2015)
Factors Extracted (7)
Female Founders [anecdotal] — Performed 63% better than all-male founding teams
Founding Team Size (Teams vs. Solo) [anecdotal] — Teams outperformed solo founders by 163%
Founder Age (Under 25) [anecdotal] — Founders under age 25 performed nearly 30% better than the average
Pedigree (Elite Schools/Companies) [anecdotal] — Teams with at least one founder from a 'top' school or company performed 220% better
Technical vs. Non-Technical Founders [anecdotal] — Teams with at least one technical founder performed 230% better than non-technical teams
Location (San Francisco vs. Others) [anecdotal] — SF-based companies had valuations 25% higher than those in other hubs (NYC, etc.)
Former Experience (Big Tech Alumni) [anecdotal] — Founders coming from Google, Facebook, or Amazon performed 50% better
Key Findings
- Founding teams with at least one woman outperformed all-male teams by 63% in terms of value creation.
- The 'Solo Founder' penalty is significant; teams of two or more founders outperformed individuals by 163%.
- Technical expertise is a massive multiplier; teams with at least one technical co-founder performed 230% better than those without.
Limitations
- Small subset of the overall market (limited to First Round's portfolio).
- The study excluded the biggest outlier (Uber) to prevent skewing the data.
- Performance is measured by 'Fair Market Value' growth, which can be subjective or volatile in private markets.
- Selection bias: The data only includes companies First Round chose to invest in, not the broader startup ecosystem.
Extracted by lib/ingest/literature_review.py via gemini-flash