| | FEB - MAR 202519By Ben Wiener, Managing Partner, Jumpspeed VenturesAcross the globe, politicians, entrepreneurs and community leaders scratch their heads and wonder "How can we turn our city into the next Silicon Valley?" As startups begin to cluster together we see catchy new nicknames like Silicon Alley (New York City), Silicon Wadi (Israel), Silicon Slopes (Utah), Silicon Prairie (Dallas) and Silicon Forest (Portland). But the question remains: what are the key elements of a successful startup ecosystem, and what can community leaders do to foster the growth of a self-sustaining startup community?Nicolas Colin of Paris' The Family has developed a three-part formula for startup ecosystem success. He writes that an entrepreneurial ecosystem must feature technology know-how (typically in the form of universities and/or large tech companies), capital (investment for new startups) and a spirit of rebellion in the city. This last element is the hardest to create "out of thin air" -- it can take many years to plant the seeds of what Professor Richard Florida calls the Creative Class, from which sprout the shoots of communal creativity and the resulting "sprit of rebellion."These three elements -- technology, capital and creativity/rebellion -- are certainly the core foundation essential to an ecosystem's success, and are hard enough to assemble. But there is an additional element that can catapult the ecosystem to even greater heights and long-term success: Diversity. While venture capital is a global industry, the most comprehensive data comes from the U.S. market. Even a cursory look at venture capital funding data shows clear biases at play across all startup ecosystems, and the closer one gets to the Mecca of venture capital, Silicon Valley, the worse the bias gets. The majority of venture capital investors are white, male, and well-educated, and the majority of founders receiving funding are white, male and well-educated. In a recent Crunchbase study of venture-backed startups, over 60% of the startups receiving funding of $1m or more were led by a founder from one of only four schools: Harvard, Stanford, MIT and Wharton. For the past few years, only 2-3% of venture-backed startups have been led by a female founder. According to a Carta survey of over 13,000 startups, while 34% of the employees were women, those women held only 20% of the equity; while 7% of the startups' founding teams were female, those women held only 7% of the equity.Such disparities are not only wrong, they are also bad for business. There is a long litany of academic research and empirical THE IMPORTANCE OF DIVERSITY IN A STARTUP ECOSYSTEMSTARTUP INSIDER
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