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Stanford high tech entrepreneurs-lebret

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A analysis of high-tech entrepreneurship at Stanford unievrsity through its staf,, students and alumni.

A analysis of high-tech entrepreneurship at Stanford unievrsity through its staf,, students and alumni.

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  • 1. STANFORD UNIVERSITY AND HIGH-TECH ENTREPRENEURSHIP: HIGH TECH ENTREPRENEURSHIP AN EMPIRICAL STUDY Hervé Lebret EPFL Babson College Entrepreneurship Research ConferenceHervé Lebret BCERC 2010 1
  • 2. Motivation High-tech entrepreneurship and innovation are important topics Whereas Silicon Valley, the Boston Area and MIT have been extensively studied, Stanford University is not really well-known, y , y y , with the exceptions of (many) famous success stories (Sun, Cisco, Yahoo, Google, etc) g ) Basic motivation is a description of high-tech entrepreneurship g and founders from Stanford university Another important motivation is that data on Stanford may induce new studies and results on the topicHervé Lebret BCERC 2010 2
  • 3. Spin-off and start-upHervé Lebret BCERC 2010 3
  • 4. The full set of data (2727 companies) 1991 study 406 234 149 4 19 2140 124 57 2368 Stanford spin-offs 204Hervé Lebret BCERC 2010 4
  • 5. Stanford spin-offs spin offs 204 companiesHervé Lebret BCERC 2010 5
  • 6. Stanford spin-offs - distribution 1% 5% Nb of companies 20% 35% Biotechnology Medtech Computers Electronics IT & SW 21% Energy ‐ Env Unknown 17% 1% 1% 1% VC-Backed 26% Biotechnology gy 38% Medtech Computers Electronics IT & SW Energy ‐ Env Unknown 19% 13% 2%Hervé Lebret BCERC 2010 6
  • 7. Stanford spin-offs – VC funding 100 in total, 4 VC-backed start-ups per year since 1985 $120M / year of VC money, $30M per company since 1985 20 18 16 14 12 10 VC Backed 8 No VC or  6 unknown 4 2 0 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 198 198 198 198 198 198 198 198 198 198 199 199 199 199 199 199 199 199 199 199 200 200 200 200 200 200 200 200 200Hervé Lebret BCERC 2010 7
  • 8. Stanford spin-offs - success $2.9B invested $2 9B invested, $8.2B of M&A, $22.4B of public value exc. Cisco ($131B) and Google ($153B) 14 000  14000 12000  10000  $M 8000  6000  VC 4000  Public 2000  M&A ‐Hervé Lebret BCERC 2010 8
  • 9. Stanford spin-offs - status 20 Status All start-ups VC- backed 18 Public 8% 14% Private P i 39% 37% 16 M&A 29% 36% Ceased 16% 13% 14 Unknown 8% Total 204 100 12 Unknown 10 Public Private 8 M&A Ceased 6 4 2 0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008Hervé Lebret BCERC 2010 9
  • 10. Stanford spin-offs – time to liquidity Nb. of companies VC backed No VC or unknown 5.97 years to liquidity when VC-backed Unknown 2 Energy – env. 3 6.55 years if no VC or unknown IT & SW 16 5 6.16 6 16 years overall Electronics 16 6 Computers 2 0 Medtech 2 4 Biotech 25 11 Total 61 31 Unknown Energy ‐ Env IT & SW No VC or  Electronics unknown Computers All Medtech VC backed Biotechnology 0.0 2.0 4.0 6.0 8.0 10.0 12.0Hervé Lebret BCERC 2010 10
  • 11. A broader picture 2140 companies out of the Wellspring of InnovationHervé Lebret BCERC 2010 11
  • 12. The full set of data 1991 study y 406 234 149 4 19 2140 124 57 Stanford spin-offs 204Hervé Lebret BCERC 2010 12
  • 13. WellSpring Start-ups (2140) - distribution 0% Biotech 2% 3% 1% Medtech 6% 5% Computers 5% Semiconductor 10% Electronics 5% Telecom IT & SW 9% Internet I t t 12% Energy ‐ Env Manuf.  Eng. Services 7% Non tech services 14% Finance Consumer goods 1% 1% 17% Others UnknownHervé Lebret BCERC 2010 13
  • 14. WellSpring High-Tech Start-ups – distribution All companies p 2% 1% 4% (1467) 10% Biotech 8% 2% Medtech Computers 7% % Semiconductor Electronics 24% 8% Telecom IT & SW Internet 13% Energy ‐ Env 0% 1% VC-backed 0% Manuf.  6% (737) 21% Biotech Eng. Services 9% 2% Medtech 29% Computers Semiconductor 9% Electronics Telecom 6% IT & SW Internet Energy ‐ Env 21% 17% Manuf.  Eng. ServicesHervé Lebret BCERC 2010 14
  • 15. Wellspring (2140) – VC funding 754 VC backed companies p 26 VC-backed start-ups per year over 1980-2004 (35% of all) $360M / year of VC money (81-94), $3.3B (95-00), $41M per company 300 250 200 150 VC‐backed Non VC backed Non VC‐backed 100 50 0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004Hervé Lebret BCERC 2010 15
  • 16. WellSpring (2140) - success $27.5B invested, $27 5B invested $185B of M&A $287B of public value including eBay ($29.3B) Yahoo ($23.6B), Baidu ($13B) but also Charles Schwab (Finance) - $21.7B The Gap (Consumer Goods) - $14.5B 100000  90000  80000  70000  60000  50000  40000  VC 30000  Public 20000  M&A 10000  ‐Hervé Lebret BCERC 2010 16
  • 17. WellSpring Start-ups (2140) – status in 2008 300 Status S All start-ups ll VC- b k d C backed 250 Public 113 5% 142 10% Private 699 33% 412 16% M&A 719 34% 120 55% 200 Ceased 456 21% 79 19% Unknown 153 7% 1 0% unknown 150 Total 2140 754 35% Public Private M&A Ceased 100 50 0 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004Hervé Lebret BCERC 2010 17
  • 18. WellSpring Start-ups (2140) – status by field 21% of high-tech are private vs. 55% of services or non-tech f hi h t h i t f i t h 100% 90% 80% 70% 60% 50% Unknown 40% Public 30% Private 20% M&A 10% Ceased 0%Hervé Lebret BCERC 2010 18
  • 19. Nb. of companies VC backed No VC or unknown WellSpring – time to liquidity Consumer Goods Finance 8 0 45 52 Non Tech Services 2 67 5.3 years to liquidity when VC-backed Engineering services 5 37 Other tech 0 5 8.0 years if no VC or unknown Manufacturing Energy – env. 1 10 0 7 6.6 years overall Internet IT & SW 177 102 125 93 Telecom 107 34 Electronics 35 43 Semiconductor 65 26 Computers 18 8 Medtech 51 27 Consumer goods g Biotech 36 18 Finance Total 630 574Non tech services Eng. Services Others Manuf.  Energy ‐ Env Without VC Internet All IT & SW Telecom VC‐backed Electronics Semiconductor Computers Medtech Biotech 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0Hervé Lebret BCERC 2010 19
  • 20. About the founders Reminder: These are Stanford alumni only; the companies may have had other founders, who are not studied here.Hervé Lebret BCERC 2010 20
  • 21. A few famous founders Sergey Brin and Larry Page Jerry Yang and David Filo Google Yahoo! Sandy Lerner Larry Bosack Dave Hewlett and Bill Packard Cisco HP Professors Theresa Meng and John Hennessy, Marc Andreessen and Professor James Clark, Atheros Communications NetscapeHervé Lebret BCERC 2010 21
  • 22. Founders: years from graduation* to foundation 100 90 80 70 60 Average: 50 2 years 40 30 20 10 0 ‐7 ‐6 ‐5 ‐4 ‐3 ‐2 ‐1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 36 Years * Stanford professors or staff imply 0 as Stanford spin-offs (license), 204 companies value. value If a company has many founders founders, 62 unknown or no Stanford founder identified this is an average by company. also 1 comp at 23, 27, and 36 yearsHervé Lebret BCERC 2010 22
  • 23. Founders: years from graduation* to foundation 250 200 150 Average: 9.3 9 3 years 100 50 0 ‐17 ‐15 ‐13 ‐11 ‐9 ‐7 ‐5 ‐3 ‐1 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 Years * Stanford professors or staff 1992 study: 383 companies, 42 unknown imply 0 as value. If a company Wellspring study: 2140 companies, 162 unknown. companies unknown has many founders, this is an founders average by company.Hervé Lebret BCERC 2010 23
  • 24. Founders: years from graduation* to foundation Total 8.86 Consumer goods 9.81 Finance 13.04 13 04 Non tech services 12.63 Eng. Services 9.97 Manuf.  9.59 Energy ‐ Env 11.95 Internet 6.95 IT & SW 7.68 Telecom 9.37 9 37 Electronics 8.8 Semiconductor 7.11 Computers 6.43 Medtech 7.05 Biotech 5.71 0 2 4 6 8 10 12 14 All 3 groups * Stanford professors or staff imply 0 as 266 unknown. value. value If a company has many founders founders, this is an average by company.Hervé Lebret BCERC 2010 24
  • 25. Serial Founders 2’266 founders created only one company 445 founders having created more than one company (16%) including 44 professors (26%) Nb of companies Nb of founders Nb of professor founded founders 1 2266 123 2 317 24 3 82 11 4 27 3 5 10 4 6 6 8 2 1 16 1 1 Total 2711 167 % serial i l 16% 26% Question: a correlation b t Q ti l ti between success and serial entrepreneur? d i l t ?Hervé Lebret BCERC 2010 25
  • 26. How do serial founders do vs. novice founders Data on non‐serial VC‐backed M&A Public Ceased 1739 Number Average Number Average Number Average 474 $36081000 253 $520000000 102 $4929000000 370 Data on serial VC‐backed M&A Public Ceased 988 Number Average Number Average Number Average 386 $39132000 220 $624000000 55 $5955000000 232 1st comp VC‐backed M&A Public Ceased 445 Number Average Number Average Number Average 147 $28466000 120 $900000000 30 $11934000000 92 2nd comp VC‐backed M&A Public Ceased 445 Number Average Number Average Number Average 202 $42042000 93 $617000000 20 $3371000000 107 3rd comp VC‐backed M&A Public Ceased 128 Number Average g Number Average g Number Average g 57 $54251000 18 $277000000 6 $2324000000 39 4th comp VC‐backed M&A Public Ceased 46 Number Average Number Average Number Average 23 $38 867 000 $38867000 13 $165 000 000 $165000000 3 $1 109 000 000 $1109000000 12Hervé Lebret BCERC 2010 26
  • 27. A summary 2’727 companies 1’050 were VC backed 150 were public in 2008 VC ($M) M&A ($M) Public ($M) Sales ($M) Jobs Stanford Start‐Ups                     2969                       8214                307136            65410          105281  1991 Study (not                       1842                     75406                185175           171579           454082  including licenses) including licenses) WellSpring of                     27125                   173375                183615           111696           401453  Innovation (tech.  only) Total‐Tech                   31936                  256995                675926          348685          960816  (non tech)                        272                    11892                154413            46348          204895  Total                    32208                   268887                830339           395033       1165711  Top 5 (tech)                     1719                   75800              445000         115661         603528 Top 10                     2794                110200              497010         145377         680087 Top 20                     4532                148800              564040         173645         762618 Top 50 T 50                     8379                194772              626037         199502  199502        872731 Top 5 5% 29% 66% 33% 63% Top 10 9% 43% 74% 42% 71% Top 20 14% 58% 83% 50% 79% Top 50 26% 76% 93% 57% 91% Sales, jobs and public value in the table come only from the 153 public companiesHervé Lebret BCERC 2010 27

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