A new study titled “Unicorn Founder DNA Report” by Defiance Capital has revealed interesting insights about the founders of unicorn companies, those valued over a billion dollars. The study, which analyzed 845 unicorns and 2,018 unicorn founders from the US and UK from 2013 to 2023, found that 70% of unicorns have “underdog founders”, which includes immigrants, women, and people of color.
The study also highlighted a positive trend towards gender diversity, with 17% of unicorns having a female founder in 2023, a significant increase from previous years. Furthermore, 53% of unicorn founders have degrees from the top 10 global universities, and 49% of unicorn CEOs had STEM degrees. Interestingly, 64% of female founding CEOs had STEM degrees, and 70% of founder teams have STEM degrees.
The study also found that the market to invest in a potential unicorn is completely fragmented at the Seed stage, meaning outlier VC funds have as much chance as a well-known fund to invest in a unicorn at the earliest stages. This suggests a lack of monopoly at the Seed stage of funding for VCs.
The study further found that unicorns were dominated by white founders, but that every third unicorn had an Asian founder. Indeed, 38% of unicorns had at least one founder who was not white: 82% had at least one white founder, and 62% had 1st or 2nd generation immigrant founders. Only 3% of unicorns had a black founder. And only 21% of immigrant and female founders raised from the top ten VCs.
Teams with female founders were two years younger than all-male teams when founding their unicorns (32 vs 34). Serial founders (50%) were more likely to succeed in building unicorns, but only 1 in five unicorns had solo founders. During the last decade, all top Seed funds were generalist funds, and the market for Seed funds is highly fragmented. Only 28% had raised capital from a top VC seed fund (with more than 1% market share). Only 34% of unicorn founders had worked at an elite employer prior to founding a unicorn, suggesting a McKinsey or similar background is not a prerequisite to success.
The study also found three dominant factors in the “DNA” of a unicorn founder. No “plan B”, “A chip on the shoulder”, and Unlimited self-belief. The study found that many unicorn founders were forced to develop a growth mindset, with values, work ethic, and ambitions all established during childhood. Most had a personal story of feeling unfairly treated or feeling limited in their native environment. The study observed these traits in communities left behind for generations, e.g. women founders, people of color, neurodivergent, or founders with atypical backgrounds.
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