Who Are You? Part 2: Gender and Education Backgrounds of Venture-Backed Internet Startups
As we reported last week, there wasn’t much to surprise the sociologists of innovation in Part 1 of the data CB Insights gleaned about the race, age, and experience of the founders at 165 Internet startups that raised venture capital funding during the first half of 2010. But there are some interesting, and perhaps unexpected, demographic findings in Part 2, which is being released today and focuses on the gender and education of Internet founders.
For example, women have a room of their own for Internet startups in Massachusetts, which has a far higher proportion—27 percent—of female founders than the national average (8 percent), California (6 percent), or New York (7 percent). With discretion being the better part of valor, I’m leaving it to Xconomy Boston Editor Greg Huang to explain this in a separate post for Boston.
Some other factoids also stand out in terms of education: Nearly half (47 percent) of the 165 venture-backed Internet founders received their undergraduate education in one of five states (guess which ones—read on for list). And of the 17 percent of the total who were educated overseas, India makes up the largest percentage, accounting for nearly a third of that group.
I have more details on all of this below.
CB Insights, the New York data services company that tracks the innovation economy, explains that its report on the demographics of Internet startups was prompted by the importance that venture capitalists place on the “people” part of the successful startup equation. Yet, as the CB Insights team puts it, “there is a dearth of data-driven insight and information about the entrepreneurs and founders behind these companies.”
As with Part 1, the methodology that CB Insights used to determine the gender of startup founders is also worth a caveat: “Our determination of gender is driven algorithmically by data CB Insights has created [for names]. In cases where gender was not conclusively provided by our algorithm, we employed human tagging,” i.e. human editors examining photos for gender.
Here’s some additional breakout highlights on the demographics of the early stage Internet startup founders who raised venture capital during the first half of 2010:
—Of the biggest three states in terms of venture capital funding (California, Massachusetts, and New York), the commonwealth that Louisa May Alcott, Susan B. Anthony, and Elena Kagan have all called home shows the highest proportion of female founders (27 percent). Massachusetts also sees the most all-female founding teams (31 percent), although it’s noteworthy that mixed gender teams in California and Massachusetts raised a higher median level of venture funding ($4.2M and $3.3M, respectively) than all-women founders. In New York, however, all-female founding teams raised median funding of $4.5 million, more than New York’s combined total for mixed teams or all-male founders.
—Of the venture founders surveyed, nearly half, as I mentioned earlier, came from one of five states. Some 15 percent attended undergraduate school in New York. The other top U.S. locations for undergraduate education were California (11 percent), Pennsylvania (9 percent), Massachusetts (8 percent), and Illinois (4 percent). About 5 percent of the founders were educated in India. The report also shows the top 13 undergraduate schools, led by Cornell and Stanford, which each had 11 college graduates among the startup founders. The Ivy League and schools with strong engineering programs also are well-represented. But all 13 of the top undergraduate schools account for 79 founders, or less than half of the 165 founders surveyed—which means there is a long tail of schools that the other 86 attended (assuming that they even graduated from college).
—Nearly half of the founders with graduate degrees attended universities in just two states, Massachusetts (24 percent) and California (21 percent). Harvard—primarily MBA graduates—tops the list of graduate schools, with 17 graduates among the founders surveyed. The schools filling out the rest of the top six: Stanford (12); MIT (11); Emory University (3) Northwestern University (3); and NYU (3).
—Throughout the country, more startup companies are headed by founders with MBAs (55 percent) than by MS degrees (32 percent) or law degrees (9 percent). In New York, almost two-thirds of the startups surveyed have founders with MBAs—while the founders of 29 percent have law degrees. Throughout the country, the survey shows that founding teams with only MBA degrees (58 percent) received the highest median level of venture funding, at $2.8 million. Still, there were some interesting differences among the three biggest states (see chart).
—As for advanced degrees, nearly two-thirds of the startup companies have founding teams that include at lease one member with a master’s or doctorate. Among the states, Massachusetts makes the strongest showing for startup teams with advanced degrees, with 73 percent having at least one member with a master’s or doctorate. New York has the most founding teams in which the highest level of education is an undergraduate degree or less. In terms of venture capital raised, the founding teams in California with the highest level of education got a higher median level of funding, but there was such relationship between funding and education in New York and Boston.
What does it all mean? Perhaps some venture-backed Internet founders will give us their perspective in the comment section below.