Ten Year Project

What we’ve learned from 10 years and over 300 investments

We believe that seed investing is much more an art than a science — and there’s no such thing as a formula for success. But as First Round celebrates our 10-year anniversary this year, we thought it could be interesting to publicly share some insights. We have a unique data set of detailed information on our community of over 300 companies — and nearly 600 founders. We wanted to look at the founder characteristics that accompanied successes and not quite successes. Of course there were counterexamples and outliers,   but some deﬁnite themes emerged. Here are 10 of them. © 2015 First Round Capital 10years.firstround.com

+63% FINDING #1 Women   are Winning Companies with a female founder performed 63% better than our investments with all-male founding teams. 10years.firstround.com

FINDING #2 Startup Fortune AVG. +30% Favors the Young The average age of a First Round founder is 32. But teams with an average founder age of under 25 (when we invested) perform nearly   30% above our average. 10years.firstround.com

FINDING #3 +220% Where You Went   HARVARD to School COLUMBIA PENN CORNELL Matters First Round companies with at least one founder who attended an Ivy League school, Stanford, MIT or Caltech performed 220% better than other teams. 10years.firstround.com

FINDING #4 The Halo  Effect of Former +160% Employers is Real Performance Founding teams with experience at +50% Amazon, Apple, Facebook, Google, Valuations Microsoft or Twitter built companies that performed 160% better than others in the First Round community. 10years.firstround.com

FINDING #5 +50% Investors Pay Valuations More for Repeat Founders Our investments in repeat founders didn't perform significantly better than our investments in first-timers — because their initial valuations tended to be 50% higher. 10years.firstround.com

FINDING #6 +163% Performance Solo Founders   +25% do Much Worse  Valuations than Teams Teams with more than one founder outperformed solo founders by a whopping 163% and solo founders' seed valuations were 25% less than our teams with more than one founder. 10years.firstround.com

FINDING #7 Technical Co- Founders  +230% are Critical in Performance Enterprise Not So Much In Consumer First Round enterprise companies with at least one technical founder perform a full -31% 230% better than their non-technical colleagues. But consumer companies with at least one technical co-founder underperform completely non-technical teams by 31%. 10years.firstround.com

FINDING #8 You Can  +1.3% Succeed Outside Better between Big Tech Hubs First Round companies founded outside New York and the Bay Area are performing just as well as their peers based in those epicenters — in fact, they do 1.3% better. 10years.firstround.com

FINDING #9 The Next  Josh, you have to see this Big Thing Can Come from Anywhere Hey, Look at my idea! +23% Companies that we discovered through Twitter, Demo Day, etc. outperformed Brand new idea! +58% referred companies by 58.4%.     Founders that came directly to us with their ideas did about 23% better. 10years.firstround.com

FINDING #10 The Action is San Francisco Moving from Sand Hill to San Francisco Before 2009, we invested nearly Sand Hill equally between San Francisco and the rest of the Bay Area. During the last five years, 75% of our Northern California companies started their companies in the city. 10years.firstround.com

SCIENCE ART It’s amazing what a decade’s worth of data can show. While these ﬁndings won’t dictate how we choose to invest from now on, we’re intrigued by what they say about the shifting direction of our industry. © 2015 First Round Capital 10years.firstround.com

A Note on Our Methodology Performance multiples reflect the appreciation (or skew all the results, showing that companies with depreciation) between our original investment a name that starts with a vowel, for example, and (1) the value at exit (for companies that have perform 100x better than all other investments). exited) or (2) the fair market value we used in our audited December 31, 2014 financial statements. To be clear, we’re not expecting this analysis to get us an invitation to join the American Statistical While we’ve invested in 300+ companies to date, Association. And we’re not claiming that our data we did not include investments in (1) the 16 is representative of the industry… or even companies that we backed in the last six months statistically significant. Rather, we believe that this (since their share value wasn’t included in our data can provide some interesting directional 2014 financials), (2) the 17 companies that we insight. We found some of the learnings to be invested in 2014 that did not raise follow-on surprising — and I’m sure we’ll continue to be financing by the end of 2014 (since their share surprised many more times over the next 10 years. value would not have time to change either up or down) and (3) our investment in Uber (as it would © 2015 First Round Capital 10years.firstround.com