What Makes A Venture Capital Investment Successful?

StartWise.com - revenue sharing crowdfundingVenture 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.

  1. 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.
  2. 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.
  3. Keep reading this post

New Crowdfunding: JOBS Act Title III For Issuers.

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Yesterday, new crowdfunding regulations under the JOBS Act Title III opened a new door in crowdfunding – now non-accredited investors can invest in private companies using online intermediary platforms. If you are considering crowdfunding for your business, here is what you need to know:

  • A company can raise a maximum aggregate amount of $1 million through crowdfunding offerings in a 12-month period via a registered broker-dealer or registered crowdfunding portal. Keep reading this post

Ready, Set, Accelerate!

W160223_HATHAWAY_NUMBEROF1Accelerators are now an integral part of the startup ecosystem. And especially for first-time founders, it is becoming a checkbox item: go through an accelerator. In the general sense, startup accelerators are fixed-term, cohort-based programs, that include mentorship and educational components and culminate in a demo day. And once you decide to join an accelerator, the decision of which accelerator to join is nearly impossible with dozens of new accelerators opening all the time. Let’s start with understanding the difference between accelerator and incubator.

What is a Startup Accelerator? It means physically locating your business in one co-working space with other startups. Your time in the space is typically limited to a 3-4 month period, basically intended to jump-start your business and then kick you out of the nest. The cash investment into your business from the accelerator itself is very minimal (usually, $20,000), but your time in the accelerator is supposed to largely improve your chances of raising venture capital from a third party after you graduate from the program. Mentorship could be coming from 100 entrepreneurs that are affiliated with the accelerator. Many of the mentors are proven CEOs, or investors looking for their next opportunity or simply helping the local startup community. Examples include Tech Stars and Y Combinator. Keep reading this post