Venture capital is largely an exercise in intuition and pattern matching. This analysis published last year by the venture capital firm First Round Capital provides insights into the firm’s unique data on over 300 companies and nearly 600 founders, including founder characteristics such as age, gender, education, firm location, and prior work and startup experience. The analysis helped discover several factors that correlate with success.
- High-performing investments tend to have at least one female founder. This is a great reminder of the importance of female entrepreneurship and of the opportunity that VCs may be missing out on. Female-founded startups outperformed 63% better than investments with all-male teams – but they are still a minority of investments with approximately 18% of new VC-backed ventures in the U.S. being startups with at least one female cofounder.
- Younger founders tend to outperform older teams even though the average age of an entrepreneur is approx. 40 and entrepreneurs improve with age. If we look at companies like Facebook, Apple, Google – the average age of the founding teams is approx. 23. Seems like younger entrepreneurs seem to be a key factor for success.
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It took four years for the Title III of the Jumpstart Our Business Startups Act (JOBS Act) to be officially enforced on May 16, 2016. Investment crowdfunding in the US is heavily regulated as compared to the UK, where regulators have been slightly more lenient which has resulted in Crowdfunding being widely viewed as a success in the UK.
The Congressional “Father” of Title III of the JOBS Act, Rep. Patrick McHenry, introduced the “Fix Crowdfunding Act” into the House of Representatives. Its provisions are focused on Keep reading this post
Every investor has his/her own investment strategy and things they look for in promising companies – but there is a must-pass list of questions that helps them navigate the crowded startup space. Here are the basic steps of company due-diligence that Angel groups use to evaluate the potential investment deal. Keep reading this post
Investing is not easy – every successful investor has a strategy and rules they follow in order to try to minimize the risks and maximize the profits. Here are some rules to follow, based on the advice from Warren Buffett and Steve Anderson (Baseline Ventures).
- Start early – developing smart investing habits now vs. later in life pays out exponentially in the future because of the “magic” of compounding returns.
- Be willing to be different – “you follow the herd, you’re gonna get hurt”.
- Don’t be afraid to risk – one of the biggest mistakes young investors make is allocating too much of their investments in cash or bonds.
- In you don’t understand it, don’t invest in it – complex deal terms, business model you don’t understand, etc. – avoid it. Keep reading this post