What does it really take to be a unicorn founder?

Here’s a stereotype of a successful founder: A Harvard dropout who learned coding at a precocious age builds a billion-dollar company at 22. And he (usually a he) does it all while sporting a Patagonia vest.

Does this image really signal success? For some reason, I suspect the Patagonia doesn’t matter. But parts of that stereotype do matter to some. I was shocked when one venture investor told me a few years ago that they placed more weight on startup creators affiliated with a high-ranking university. 

DCVC Partner Ali Tamaseb has new research that suggests that much of the cliche is just that—a cliche.

Tamaseb collected data on U.S.-based startups that reached $1 billion in valuation and were founded between 2005 and 2018. Across some 200-plus unicorns, the median age of the CEO at the company’s founding was 34. The founders were more likely to have PhDs than to be dropouts. And as many CEOs went to a university that didn’t breach top 100 rankings globally as those that went to top tens.

“The mythical Ivy League college dropout who launched a company in his or her dorm room makes up only a tiny percentage of billion-dollar startup founders,” wrote Tamaseb in his upcoming book, Super Founders, What Data Reveals About Billion-Dollar Startups:

“In terms of producing successful entrepreneurs, a university’s rank seems less important than its culture and location. Some high-ranking schools are mostly absent from the data: Princeton, Caltech, and University of Chicago, for example. Other schools with a strong entrepreneurial culture punch above their ranks: ten billion-dollar founders hold degrees from the University of Southern California, nine from the University of Michigan, and six from the Indian Institutes of Technology.”

Where the entrepreneurs went to work before, however, does appear to correlate with the founding of a billion-dollar startup. Some 60% worked at a well-known brand like Google,  while another 30% had not worked for anyone but themselves, per the book.

The findings have interesting implications. Unicorn creation has exploded in recent years: Some 337 unicorns now exist in the U.S. As of May 2021, per CBInsights data.  

I must admit I also felt a dose of vindication as a reporter when I chatted with Tamaseb (we also discussed what percent of unicorns fail).

My peers and I often ask founders questions knowing they have a conservatively estimated 70% chance of being unanswered. The rotation includes: “What is your valuation? What is your revenue? Forget EBITDA, what about net income? Was this a down round?” And, of course, “do you have competition?” 

More often than not, the answer is, “Undisclosed, undisclosed, undisclosed, we’re…happy with our agreement” and “we have none.” Which, well, is more than a little questionable 🤨.

Guess what? Only about 15% of companies that hit a $1 billion valuation faced no competition, per Tameseb’s findings. However, you were far more likely to reach $1 billion if your competitors were sleepy giants rather than fellow startups. 

I dive into some of the most noteworthy parts of our conversation, including what percent of unicorns Tamaseb says fails, in this story here. Read on.

Lucinda Shen
Twitter: @shenlucinda
Email:  [email protected]

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VENTURE DEALS

- Ada, a Toronto-based maker of chatbot software, raised $130 million in Series C funding. Spark Capital led the round and was joined by investors including Tiger Global, Accel, Bessemer, FirstMark, Version One, and Burst, valuing the business at $1.2 billion.

- Material Bank, a Miami-based marketplace for searching and sampling architectural, design, and construction materials, raised $100 million in Series C funding. General Catalyst and Durable Capital Partners led the round and was joined by investors including BOND, Lead Edge Capital, Bain Capital Ventures, and Raine Ventures. 

- Lightmatter, a Boston-based photonic computing company,  raised $80 million in Series B funding. Viking Global Investors led the round and was joined by investors including GV, Hewlett Packard Enterprise, Lockheed Martin, Matrix Partners, SIP Global Partners, and Spark Capital.

- Innovusion, a Sunnyvale, Calif.-based LiDAR developer, raised $64 million in Series B funding. Temasek led the round and was joined by investors including Bertelsmann Asia Investment Fund, Joy Capital, Nio Capital, Eight Roads Ventures, and F-Prime Capital.

- Oculii, a Dayton, Oh.-based provider of A.I. Software for radar perception, raised $55 million in Series B funding. Catapult Ventures and Conductive Ventures led the round and was joined by investors including Taiwania Capital, Susquehanna Investment Group, HELLA Ventures, PHI-Zoyi Capital, R7 Partners, VectoIQ, ACVC Partners, Mesh Ventures, Schox Ventures, and Signature Bank.

- Vori Health, a San Francisco-based medical provider for musculoskeletal care, raised $45 million in Series A funding. New Enterprise Associates led the round and was joined by investors including AlleyCorp and Max Ventures. 

- Railz.ai, a Toronto-based developer of APIs for small to medium sized businesses and their customers, raised $15 million. Nyca Partners led and was joined by investors including Susa Ventures, Vestigo Ventures, Entrée Capital Global Founders Capital, Plug and Play Ventures, N49P, and Hack VC.

- Ecocem, a Dublin, Ire.-based green cement company, raised €22.5 million ($27 million). Breakthrough Energy Ventures and Breakthrough Energy Ventures-Europe led the round.

- Nøie, a Copenhagen-based customised skincare platform, raised $12 million in Series A funding. Talis Capital led the round and was joined by investors including Inventure.

- 180° Seguros, a Brazilian Insurtech, raised $8 million in seed funding. Investors included Canary, Dragoneer and Rainfall.

- Figure, a San Francisco-based compensation software startup, raised $7.5 million in seed funding. CRV led the round and was joined by investors including Bling Capital, Better Tomorrow Ventures, and Garage Capital, as well as Naval Ravikant, Jason Calacanis, and Steve Huffman.

- BluBracket, a Palo Alto, Calif.-based security startup, raised $6.5 million in seed funding. Unusual Ventures led the round and was joined by investors including Point72 Ventures, SignalFire, and Firebolt Ventures.

- ViaBot, a San Francisco-based robotics startup focused on the maintenance of large properties, raised $6.1 million in funding. Baseline Ventures, Morado Ventures, and Grit Ventures back the firm.

- Dasara,  Sunnyvale, Calif.-based data security company, raised $6 million in seed funding. Sierra Ventures led the round and was joined by investors including Saama Capital, One Way Ventures, and Sand Hill Angels.

- Metafy, a Blairsville, Pa.-based marketplace for matching gamers with instructors, raised $5.5 million in additional funding. Forerunner Ventures, DCM and Seven Seven Six led the round.

- Onda, a Santa Monica, Calif.-based maker of canned sparkling tequila beverages co-founded by Shay Mitchell, raised $5 million in Series A funding. Aria Growth Partners led the round.

- DappRadar, a Lithuania-founded app store for decentralized applications, raised $5 million. Investors included Prosus Ventures, Blockchain.com Ventures, Lightspeed Venture Partners, and NordicNinja Ventures.

- Expressable, an Austin-based speech therapy solution, raised $4.5 million in seed funding. Lerer Hippeau and NextView Ventures led the round and were joined by investors including Amplifyher Ventures. 

- Revere VC, a San Francisco and Hong Kong based asset management firm, raised $1.35 million in seed funding. Investors included AngelList, Twitch co-founder Kevin Lin, and Thailand-based Siamrajthanee Group / SeaX founder Nattaphol Vimolchalao.

PRIVATE EQUITY

- Hellman & Friedman agreed to take At Home Group, a Plano, Texas-based furniture and home decor chain, private for $2.8 billion.

- The Equine Network, backed by GCP, acquired Roping.com and EventingTraining.com, providers of subscription-based videos. Financial terms weren't disclosed.

- CallRail, backed by Sageview Capital, acquired PhoneWagon, a New York City-based call tracking software company. Financial terms weren't disclosed.

- KKR agreed to invest in Charter Next Generation, a New York-based producer of specialty films used in flexible packaging, industrial, healthcare, and consumer applications. KKR will become a co-owner with Leonard Green & Partners. The Abu Dhabi Investment Authority will also be investing. Financial terms weren't disclosed.

- Periscope Equity launched brightfin, a platform for managing mobile, telecom, and cloud expenses. It was formed via a combination of MobiChord, Visage, and Mobile Solutions. Financial terms weren't disclosed.

- Harvest Partners agreed to invest in HelpSystems, a Minneapolis-based IT and software solution. Financial terms weren't disclosed.

- TELEO Capital made a “significant investment” in Teesnap, a Las Vegas, N.V.-based golf course software provider. Financial terms weren't disclosed.

EXITS

- MasTec (NYSE: MTZ) acquired INTREN, a Union, Ill.-based specialty utilities contractor, for $420 million, from One Equity Partners. Financial terms weren't disclosed.

OTHER

- Peraton acquired Perspecta [NYSE: PRSP], a Chantilly, Va.-based tech consultancy for the defense, intelligence, civilian, health care and state and local markets, for about $7.1 billion.

- EQT Corp. ( NYSE: EQT ) will acquire Alta Resources Development, a U.S.-based natural gas producer, for approximately $2.9 billion. Financial terms weren't disclosed.

- Walmart’s health division will acquire MeMD, a Phoenix, Ariz.-based  virtual care provider. Financial terms weren't disclosed.

IPOS

- Remitly, a Seattle-based fintech, is prepping for an IPO that could value it around $5 billion, per Reuters.

- Waterdrop, a Chinese health insurance platform that uses crowdfunding, raised $360 million in an offering of 30 million ADSs priced at $12. Boyu Capital, Gaorong Capital, and Swiss Re back the firm. 

- Monday.com, an Israel-based maker of project management tools, filed confidentially to go public, per Bloomberg.

SPAC

- Alto Pharmacy, a San Francisco-based prescription medication delivery startup, is in talks to merge with Gores Technology Partners II, per Bloomberg. SoftBank and OliveTree back the firm.

- Science 37, a Culver City, Calif.-based maker of a clinical trial operating system, will go public via merger with LifeSci Acquisition II (NASDAQ: LSAQ), a SPAC. A deal values the business at $1.1 billion.