Many startups compete for investment, but some traits increase funding chances significantly.
- Research involving over 17,000 startup teams identifies key qualities linked to funding success.
- Advanced educational qualifications, such as PhDs and MBAs, correlate with higher funding.
- Experience as a serial founder or in consultancy roles boosts fundraising capabilities.
- Diverse international backgrounds and optimal team sizes are advantageous for startup success.
A recent study conducted by NGP Capital investigates the attributes of founders that lead to successful fundraising. Analysing data from more than 17,836 tech startups across Europe since 2014, the study highlights specific traits that correlate with success in securing investment.
The findings indicate that educational background plays a crucial role. Founders holding PhDs raised an average of $34.1 million, while those with MBAs attracted about $30 million. In contrast, bachelor’s degree holders secured $15.2 million, and those without formal degrees raised $13.9 million. The prestige of the university also influences outcomes, with University of Cambridge alumni raising the most at $11.2 billion, followed by INSEAD, University of Oxford, London School of Economics, and Technical University of Münich.
Experience in founding startups increases potential funding by 45% compared to first-time founding teams. Consultancy experience also benefits founders, with former employees of top firms like McKinsey, Boston Consulting Group, and Bain & Company securing substantial investments. Founders with finance backgrounds from institutions like Deutsche Bank and Morgan Stanley also perform strongly.
An international background is another positive factor. Startups with at least one international founder raised 33% above the baseline, while all-local teams fell 13% below. The UK boasts the highest percentage of international founders at 39%, greatly surpassing Germany’s 28% and France’s 16%. The report also finds that the ideal number of co-founders is four, as startups with this configuration acquired an average of $70.5 million. Teams of three received $35.1 million, pairs $22.9 million, and solo founders $11.9 million.
Bo Ilsoe, managing partner at NGP Capital, notes that “Europe’s ecosystem values the diverse skills and academic credentials within founding teams.” This approach differentiates Europe from Silicon Valley, where a strong technological focus is often prioritised. The blend of skills and academic prestige in Europe provides a fertile environment for startup innovation and opportunity.
The combination of advanced education, relevant experience, international diversity, and optimal team size significantly enhances a startup’s ability to secure investment.
