Do start-ups founded by women outperform those founded by men?

|
Do start-ups founded by women outperform those founded by men?
Image Credit: Dreamstime.com
Team Clark is adamant that we will never write content influenced by or paid for by an advertiser. To support our work, we do make money from some links to companies and deals on our site. Learn more about our guarantee here.
Advertisement

Are female-founded start-ups more successful than those founded by men? A new study takes a look at the data.

Read more: How to start your own business from scratch

Factors for start-up success

The study, published by venture capital firm First Round Capital, took a look at 300 companies and 600 founders to see what factors played a role in success. The analysts looked at age, gender, education, firm location, and prior work and startup experience.

The first key takeaway they discovered was startup teams that included at least one women had higher-performing investments than those that didn’t. How much did teams with women outperform male dominated founders? At least 63%, according to the report. 

Some other factors of note included data related to age, education and experience. Though the average age of entrepreneurs is generally 40, younger founders out-performed startups with older founders. In fact, founding teams with an average age under 25 performed 30% better than the average investment. When you think about the average age of the founders of Facebook, Apple, Google, and Microsoft, (23), this adds even more evidence that young age in the technology sector is a contributor to success. 

Additionally, those with Ivy League education backgrounds performed better — about 220% better than other teams. First Round found that 38% of the companies in their portfolio had one founder who went to an Ivy League school, Stanford or MIT. 

The last contributing factor was experience at other top tech companies, such as Amazon, Apple, Facebook, Google, Microsoft, or Twitter. Companies with founders coming out of one of these companies performed 160% better than other companies, and also secured pre-money valuations almost 50% larger than other tech start-ups. 

Read more: Best ways to get a small business loan

Advertisement
Charis Brown About the author:
Charis Brown is the Senior Deals Editor for ClarkDeals.com. Her favorite discount store is Nordstrom Rack, where she once bought something for $.01! She and her husband Justin paid off $27,000 of debt in 11 months and now live debt-free.
View More Articles
  • Show Comments Hide Comments