Founder Trends: A View From The Moment Of Inception

Given that we see hundreds of start-ups each month, the Social Starts team has a unique perspective on trends among founders of new companies in social/mobile. Here are some of the trends among early stage entrepreneurs we have seen so far this year:

STRONG FEMALE FOUNDERS. Female founders have been much in the news lately. First Round Capital noted in their 10-year update that they have gotten more value from female-founded investments than male ones. Another report from the Female Founders Fund stated that New York-based female-founded companies reaching A rounds increased by 100% in 2014. As the fund that sees more moment-of-inception companies in New York and San Francisco than any other, Social Starts sees both these trends in spades. The set of female founders in New York we’ve met over the past six months are among the best we have known in our long careers.

Not only are these female founders incredibly strong, they aren't by and large doing overtly female projects. These companies are in real estate and data modeling and analytics. The female founders are experienced execs or data scientists or engineers. In short, they are simply great and well prepared for their roles.

Reasons for the emergence of this strong caste of female founders, we think, has many roots. One is the natural growth for improved (if still far from ideal) diversity in tech. Women who came out of great schools with tech degrees and then put in stints in dev or product at Google or Apple or Facebook are groomed to lead just as their male counterparts. We also are seeing women who have already been part of winning teams. So, they have the direct experience of what it takes for a start-up to build value. And, given those backgrounds, they have skilled colleagues ready to join their new companies. Additionally, we are seeing remarkable women from outside the U.S. come here because they believe America is still far more open to talented women than wherever they came from.

WENDY AMONG THE LOST BOYS. Alongside the sterling female start-ups we are noticing another, more frustrating expression of female strength. We now have a substantial list of outstanding female founders far more impressive than the companies they currently run. We would back these founders in a heartbeat, but they have chained themselves to second rate ideas and second rate teams. Why? We think it is a kind of Wendy among the Lost Boys scenario. These founders feel a need to channel their strength to "improve" those around them. They don't see the weakness of the idea or team; instead, they focus on their own perceived capacity to "perfect" them both. We find this admirable but misguided. In our experience a weak idea is weak no matter how strong the CEO, and a weak team trumps a strong founder. These Wendy-women, in our view, have one more turn on the maturity wheel to turn before they are ready to join their sisters on the A-list. But join them we feel they will.

BEGINNINGS FROM THE END OF THE VIETNAM WAR. This year we have seen a sudden spurt in new companies from Vietnamese entrepreneurs. In every case, they are the children of those who fled their country in the 1970s at the time of America's departure from the Vietnam War. One founder we just backed was is the first Vietnamese graduate from Stanford B school since the War. Another had a parent who was literally thrown off the boat while fleeing, and had to swim miles to shore to survive. Unsurprisingly, these founders show a deep strain of grit and determination. They have seen the bottom and so fear nothing. They are one of the most consistently impressive groups we have seen.

YOUTH MOVEMENT. Increasingly, we are seeing, and backing, founders who are still in college. We funded one company this year the week of Harvard undergrad graduation. We have one team still in B School at Harvard and two others we are currently considering who haven't yet graduated from Stanford. We also backed one of this year's Thiel Fellows, who skipped college altogether to get his company started. What is perhaps most striking about these ultra-young founders is how prepared and mature they are. Our Harvard undergrad entrepreneur, for instance, had already startedthree companies and helped found a notable VC firm, all in his teens. We recognize the risks in backing companies whose founders may have competing interests for some time. But, as moment-of-inception investors, who focus heavily on the character of the founder, we feel comfortable backing the strongest people at the earliest possible opportunity.

RISING L.A. We have invested in companies in Los Angeles throughout our fund history. But in the past year, L.A. has become our fastest growing geo. Talented entrepreneurs are moving to L.A. from New York and the Bay Area. They see lower work and lifestyle costs, better tech recruiting opportunities, a growing and supple investor base, along with the presence of big media companies who are increasingly eager to back the social/mobile future. Considering that storytelling is one of the prime drivers of today's Social Construct, it makes sense that L.A. would become more central. Plenty of folks there who know you can get rich telling stories; they've done it.

Although this list is not exhaustive, it captures the key trends that we’re noticing among early stage entrepreneurs this year. And we’re looking forward to seeing how these trends will play out over the next several years.