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STANFORD UNIVERSITY AND
               HIGH-TECH ENTREPRENEURSHIP:
               HIGH TECH ENTREPRENEURSHIP
                    AN EMPIRICAL STUDY


                          Hervé Lebret
                             EPFL

                    Babson College Entrepreneurship
                         Research Conference




Hervé Lebret                    BCERC 2010            1
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 topic


Hervé Lebret                       BCERC 2010                             2
Spin-off and start-up




Hervé Lebret                BCERC 2010   3
The full set of data (2727 companies)

                                        1991 study
                                           406
                              234



                        149                  4

                                19

                 2140                            124
                                57

    2368                                         Stanford spin-offs
                                                        204

Hervé Lebret                    BCERC 2010                        4
Stanford spin-offs
                        spin offs
                204 companies




Hervé Lebret          BCERC 2010    5
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
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
               200
Hervé Lebret                      BCERC 2010                                7
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 
                  14'000
                  12'000 
                  10'000 

                $M   8'000 
                     6'000                      VC
                     4'000                      Public
                     2'000                      M&A

                        ‐




Hervé Lebret                       BCERC 2010            8
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
               2008
Hervé Lebret                                    BCERC 2010             9
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        12.0

Hervé Lebret                                      BCERC 2010                                                   10
A broader picture
                 2140 companies
               out of the Wellspring
                   of Innovation

Hervé Lebret            BCERC 2010     11
The full set of data
                                       1991 study
                                                y
                                          406


                            234




                      149                  4



                              19




                2140
                                               124

                              57



                                                     Stanford spin-offs
                                                            204


Hervé Lebret                  BCERC 2010                                  12
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
                                                                Unknown




Hervé Lebret                                    BCERC 2010                          13
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. Services

Hervé Lebret                                        BCERC 2010                                                         14
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 2004




Hervé Lebret                                                            BCERC 2010                                                                        15
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
               100'000 
                90'000 
                80'000 
                70'000 
                60'000 
                50'000 
                40'000                                                            VC

                30'000                                                            Public

                20'000                                                            M&A

                10'000 
                    ‐




Hervé Lebret                                BCERC 2010                                     16
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
       2004
Hervé Lebret                                      BCERC 2010                   17
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
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                   574
Non 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    20.0
Hervé Lebret                                        BCERC 2010                                                                       19
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
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                                    Netscape

Hervé Lebret                                     BCERC 2010                                                21
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 years
Hervé Lebret                                         BCERC 2010                                                      22
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
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
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
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            $36'081'000 253         $520'000'000 102        $4'929'000'000 370
  Data on serial       VC‐backed                  M&A                      Public                    Ceased
  988                  Number      Average        Number   Average         Number   Average
                       386            $39'132'000 220         $624'000'000 55         $5'955'000'000 232
  1st comp             VC‐backed                  M&A                      Public                    Ceased
  445                  Number      Average        Number   Average         Number   Average
                       147            $28'466'000 120         $900'000'000 30        $11'934'000'000 92
  2nd comp             VC‐backed                  M&A                      Public                    Ceased
  445                  Number      Average        Number   Average         Number   Average
                       202            $42'042'000 93          $617'000'000 20         $3'371'000'000 107
  3rd comp             VC‐backed                  M&A                      Public                    Ceased
  128                  Number      Average
                                        g         Number   Average
                                                                g          Number   Average
                                                                                         g
                       57             $54'251'000 18          $277'000'000 6          $2'324'000'000 39
  4th comp             VC‐backed                  M&A                      Public                    Ceased
  46                   Number      Average        Number   Average         Number   Average
                       23             $38 867 000
                                      $38'867'000 13          $165 000 000
                                                              $165'000'000 3          $1 109 000 000
                                                                                      $1'109'000'000 12




Hervé Lebret                                        BCERC 2010                                                26
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                     2'969                       8'214                307'136            65'410          105'281 
                1991 Study (not                          1'842                     75'406                185'175           171'579           454'082 
                including licenses)
                including licenses)
                WellSpring of                         27'125                   173'375                183'615           111'696           401'453 
                Innovation (tech. 
                only)
                Total‐Tech                                     31'936                  256'995                675'926          348'685          960'816 
                (non tech)                                          272                    11'892                154'413            46'348          204'895 
                Total                                          32'208                   268'887                830'339           395'033       1'165'711 

                Top 5 (tech)                                     1'719                     75'800                445'000           115'661           603'528
                Top 10                                           2'794                  110'200                  497'010           145'377           680'087
                Top 20                                           4'532                  148'800                  564'040           173'645           762'618
                Top 50
                T 50                                             8'379                  194'772                  626'037           199'502 
                                                                                                                                   199'502           872'731
                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 companies

Hervé Lebret                                                         BCERC 2010                                                                                27

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Stanford high tech entrepreneurs-lebret

  • 1. STANFORD UNIVERSITY AND HIGH-TECH ENTREPRENEURSHIP: HIGH TECH ENTREPRENEURSHIP AN EMPIRICAL STUDY Hervé Lebret EPFL Babson College Entrepreneurship Research Conference Hervé 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 topic Hervé Lebret BCERC 2010 2
  • 3. Spin-off and start-up Hervé 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 204 Hervé Lebret BCERC 2010 4
  • 5. Stanford spin-offs spin offs 204 companies Hervé 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 08 198 198 198 198 198 198 198 198 198 198 199 199 199 199 199 199 199 199 199 199 200 200 200 200 200 200 200 200 200 Hervé 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  14'000 12'000  10'000  $M 8'000  6'000  VC 4'000  Public 2'000  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 2008 Hervé 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 12.0 Hervé Lebret BCERC 2010 10
  • 11. A broader picture 2140 companies out of the Wellspring of Innovation Hervé Lebret BCERC 2010 11
  • 12. The full set of data 1991 study y 406 234 149 4 19 2140 124 57 Stanford spin-offs 204 Hervé 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 Unknown Hervé 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. Services Hervé 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 2004 Hervé 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 100'000  90'000  80'000  70'000  60'000  50'000  40'000  VC 30'000  Public 20'000  M&A 10'000  ‐ 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 2004 Hervé 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 630 574 Non 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 20.0 Hervé 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 Netscape Hervé 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 years Hervé 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 $36'081'000 253 $520'000'000 102 $4'929'000'000 370 Data on serial VC‐backed M&A Public Ceased 988 Number Average Number Average Number Average 386 $39'132'000 220 $624'000'000 55 $5'955'000'000 232 1st comp VC‐backed M&A Public Ceased 445 Number Average Number Average Number Average 147 $28'466'000 120 $900'000'000 30 $11'934'000'000 92 2nd comp VC‐backed M&A Public Ceased 445 Number Average Number Average Number Average 202 $42'042'000 93 $617'000'000 20 $3'371'000'000 107 3rd comp VC‐backed M&A Public Ceased 128 Number Average g Number Average g Number Average g 57 $54'251'000 18 $277'000'000 6 $2'324'000'000 39 4th comp VC‐backed M&A Public Ceased 46 Number Average Number Average Number Average 23 $38 867 000 $38'867'000 13 $165 000 000 $165'000'000 3 $1 109 000 000 $1'109'000'000 12 Hervé Lebret BCERC 2010 26
  • 27. A summary 2’727 companies 1’050 were VC backed 150 were public in 2008 VC ($M) M&A ($M) Public ($M) Sales ($M) Jobs Stanford Start‐Ups                     2'969                       8'214                307'136            65'410          105'281  1991 Study (not                       1'842                     75'406                185'175           171'579           454'082  including licenses) including licenses) WellSpring of                     27'125                   173'375                183'615           111'696           401'453  Innovation (tech.  only) Total‐Tech                   31'936                  256'995                675'926          348'685          960'816  (non tech)                        272                    11'892                154'413            46'348          204'895  Total                    32'208                   268'887                830'339           395'033       1'165'711  Top 5 (tech)                     1'719                   75'800              445'000         115'661         603'528 Top 10                     2'794                110'200              497'010         145'377         680'087 Top 20                     4'532                148'800              564'040         173'645         762'618 Top 50 T 50                     8'379                194'772              626'037         199'502  199'502        872'731 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 companies Hervé Lebret BCERC 2010 27