Diversity and diversification are the keys
Investing in tech startups is hard, particularly global ones. Finding these gems in the wild takes unique insight, experience and a huge network of specialists.
On the same day that Elon Musk unveiled how he is going to take us to the Moon and Mars within a few years and across our world in half an hour it seems fitting we now have even more science around startup investing.
We are very happy to share some new Harvard research to help guide thinking. The short story to exceptional returns based on a study of 300 companies. More women. More education. More cities. More specific experience. More youth.
The importance of female entrepreneurs in a traditionally male-dominated industry and the benefits of a good education and pre-startup experience are clear. The leveling of the geographic playing field gives credence to the development of startup-friendly areas in cities nationwide. And while fit, gut feel, and due diligence will always be critical, this study points to the value of data in making equity capital decisions. Successful companies and their portfolios would be well served to understand their investments more deeply through longitudinal data collection and analysis. Smart companies will use this to create competitive advantage for themselves and for the startups they invest in.
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