Atomico, the London-based venture capital firm led by Skype co-founder Niklas Zennström, today published a first quarterly update to its recent billion-dollar data research project (which found that the majority of tech startups that have gained a $1 billion valuation in the past decade hailed from outside Silicon Valley).
For the update, Atomico zoomed in on the leadership it takes to reach that coveted billion-dollar milestone – and as it turns out, you’re better off sticking with your ‘founding CEO’ than bringing a ‘professional adult’ on board to run the business at some point.
To wit: according to Atomico’s data analysis, 133 companies out of 156 in total (85%) pushed through the billion-dollar threshold by sticking with their founding CEO (emphasis ours).
Furthermore, of the 27 companies founded since 2010 that have reached billion-dollar status, only a single one does not have a ‘founder-CEO’. The trend might thus be accelerating.
The data also shows that 144 out of 156 companies (92%) started out with a tech or product-driven founding team, which Atomico says signals the overwhelming likelihood of success in technology with engineers at the top. This is a tad counter-intuitive, however, because from what I’ve seen in Europe startups driven by ‘techies’ often don’t grow (or grow fast enough) in the crucial early stages because they have a hard time nailing down the marketing/business side of things.
But, apparently, for building really big businesses in tech it’s better to have and keep the tech talent at the helm. According to Atomico’s research, very few companies (only 12 in total) have managed to surpass the $1 billion valuation mark sans tech or product-driven leadership.
Breaking Atomico’s data down by sector shows there are certain types of business more likely to replace their founder on the road to reaching the billion-dollar milestone. 67% of companies in ‘Enterprise Data & Infrastructure’ have a founding CEO compared with 78% of companies in ‘Enterprise Apps’ and 79% in ‘Gaming’.
A propos, since Atomico’s research findings were first published in October 2014, another 13 companies have hit the billion-dollar milestone, amounting to 156 in total. From the new entrants, two were from Europe, six from Asia and two from the US (but notably not from Silicon Valley).
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