stanford high tech entrepreneurs lebret
DESCRIPTION
An analysis of high-tech entrepreneurship at Stanford unievrsity through its staf,, students and alumni.TRANSCRIPT
STANFORD UNIVERSITY AND HIGH TECH ENTREPRENEURSHIP HIGH-TECH ENTREPRENEURSHIP:
AN EMPIRICAL STUDY
Hervé LebretEPFL
Babson College EntrepreneurshipResearch ConferenceResearch Conference
1BCERC 2010Hervé Lebret
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 gand founders from Stanford university
Another important motivation is that data on Stanford may induce new studies and results on the topic
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Spin-off and start-up
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1991 study
The full set of data (2727 companies)
1991 study406
234234
149 4149
19
4
571242140
2368 Stanford spin-offs204
57
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204
Stanford spin-offsStanford spin offs204 companies204 companies
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Stanford spin-offs - distribution1%
35%20%
1%5% Nb of companies
Biotechnology35%20% Biotechnology
Medtech
Computers
Electronics
17%
21%
IT & SW
Energy ‐ Env
Unknown
1%
26%
1% 1%
Biotechnology
VC-Backed
38%26% gy
Medtech
Computers
Electronics
19%
IT & SW
Energy ‐ Env
Unknown
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13%
2%
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
18
20
12
14
16
8
10
12
VC Backed
4
6No VC or unknown
0
2
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
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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
Stanford spin-offs - success$2 9B invested $2.9B invested, $8.2B of M&A, $22.4B of public value exc.
Cisco ($131B) and
14'000
Cisco ($131B) and Google ($153B)
10'000
12'000
14 000
6'000
8'000
VC
$M
2'000
4'000 Public
M&A
‐
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Stanford spin-offs - status
18
20
Status All start-ups VC- backed
Public 8% 14%
P i 39% 37%
14
16Private 39% 37%
M&A 29% 36%
Ceased 16% 13%
Unknown 8%
10
12Unknown
Public
Total 204 100
8
10Private
M&A
Ceased
4
6
0
2
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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
Stanford spin-offs – time to liquidityNb. of companies VC backed No VC or unknown
Unknown 2
Energy – env. 3
IT & SW 16 5
Electronics 16 6
5.97 years to liquidity when VC-backed6.55 years if no VC or unknown6 16 years overall Electronics 16 6
Computers 2 0
Medtech 2 4
Biotech 25 11
6.16 years overall
Unknown
Total 61 31
IT & SW
Energy ‐ Env
Computers
ElectronicsNo VC or unknown
All
Biotechnology
Medtech VC backed
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0.0 2.0 4.0 6.0 8.0 10.0 12.0
A broader pictureA broader picture2140 companies2140 companies
out of the Wellspringout of the Wellspringof Innovationof Innovation
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1991 studyThe full set of data
y406
234234
149 4
19
57
1242140Stanford spin-offs
204
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204
WellSpring Start-ups (2140) - distribution
3% 1%
0%
2%
Biotech
Medtech5%
1%
5%10%
6%Computers
Semiconductor
Electronics5%
Electronics
Telecom
IT & SW
I t t9%12%
Internet
Energy ‐ Env
Manuf.
14%7%
Eng. Services
Non tech services
Finance
17%1%1%Consumer goods
Others
Unknown
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WellSpring High-Tech Start-ups – distributionAll companies
4%8% 2%
%
2% 1% 10% Biotech
Medtech
Computers
p(1467)
7%
8%24%
Semiconductor
Electronics
Telecom
13%
IT & SW
Internet
Energy ‐ Env0% 0%1% VC-backed (737)
21%Manuf.
Eng. Services
6%
9%2%
29%
Biotech
Medtech
Computers
(737)
9%Semiconductor
Electronics
Telecom6%
17%21%
IT & SW
Internet
Energy ‐ Env
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17%Manuf.
Eng. Services
Wellspring (2140) – VC funding754 VC backed companies p26 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
250
300
200
250
150VC‐backed
Non VC‐backed
100
Non VC backed
0
50
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1980198119821983198419851986198719881989199019911992199319941995199619971998199920002001200220032004
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) - $21.7BThe Gap (Consumer Goods) - $14.5B
100'000
70'000
80'000
90'000
40'000
50'000
60'000
VC
10'000
20'000
30'000 Public
M&A
‐
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WellSpring Start-ups (2140) – status in 2008
300
S ll C b k d
250
Status All start-ups VC- backed
Public 113 5% 142 10%
Private 699 33% 412 16%
M&A 719 34% 120 55%
150
200
unknown
Public
Private
Ceased 456 21% 79 19%
Unknown 153 7% 1 0%
Total 2140 754 35%
100
Private
M&A
Ceased
0
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
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WellSpring Start-ups (2140) – status by field
21% f hi h t h i t 55% f i t h
100%
21% of high-tech are private vs. 55% of services or non-tech
70%
80%
90%
50%
60%
70%
Unknown
30%
40% Public
Private
M&A
0%
10%
20% M&A
Ceased
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WellSpring – time to liquidityNb. of companies VC backed No VC or unknown
Consumer Goods 8 45Finance 0 52Non Tech Services 2 67Engineering services 5 37Other tech 0 5Manufacturing 1 10Energy – env. 0 7
5.3 years to liquidity when VC-backed8.0 years if no VC or unknown
0 7Internet 177 102IT & SW 125 93Telecom 107 34Electronics 35 43
6.6 years overall
Consumer goods
35 43Semiconductor 65 26Computers 18 8Medtech 51 27Biotech 36 18
Others
Eng. Services
Non tech services
Finance
g Biotech 36 18Total 630 574
IT & SW
Internet
Energy ‐ Env
Manuf.
Without VC
All
Computers
Semiconductor
Electronics
Telecom VC‐backed
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Biotech
Medtech
About the foundersAbout the founders
Reminder: These are Stanford alumni only; the companies may have had other founders, who are not studied here.
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may have had other founders, who are not studied here.
A few famous founders
Jerry Yang and David FiloYahoo!
Sergey Brin and Larry Page Google
Dave Hewlett and Bill PackardHP
Sandy Lerner Larry BosackCisco HPCisco
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Professors Theresa Meng and John Hennessy, Atheros Communications
Marc Andreessen and Professor James Clark,Netscape
Founders: years from graduation* to foundation
80
90
100
60
70
80
Average:2
40
50 2 years
10
20
30
0
10
‐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 value If a company has many founders Stanford spin-offs (license), 204 companies
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value. If a company has many founders, this is an average by company.62 unknown or no Stanford founder identified
also 1 comp at 23, 27, and 36 years
250
Founders: years from graduation* to foundation
200
250
150 Average:9 3
100
9.3 years
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
1992 study: 383 companies, 42 unknownWellspring study: 2140 companies 162 unknown
* Stanford professors or staff imply 0 as value. If a company has many founders this is an
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Wellspring study: 2140 companies, 162 unknown. has many founders, this is an average by company.
Founders: years from graduation* to foundation
13 049.81
8.86
FinanceConsumer goods
Total
9.599.97
12.6313.04
Manuf. Eng. Services
Non tech servicesFinance
9 377.68
6.9511.95
TelecomIT & SWInternet
Energy ‐ Env
6.437.11
8.89.37
ComputersSemiconductor
ElectronicsTelecom
5.717.05
0 2 4 6 8 10 12 14
BiotechMedtech
All 3 groups266 unknown.
* Stanford professors or staff imply 0 as value If a company has many founders
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value. If a company has many founders, this is an average by company.
Serial Founders
2’266 founders created only one company445 founders having created more than one company (16%)
including 44 professors (26%)
Nb of companies founded
Nb of founders Nb of professor foundersfounded founders
1 2266 1232 317 243 82 113 82 114 27 35 10 46 68 2 1
16 1 1Total 2711 167
% i l 16% 26%
Q ti l ti b t d i l t ?
% serial 16% 26%
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Question: a correlation between success and serial entrepreneur?
How do serial founders do vs. novice founders
Data on non‐serial VC‐backed M&A Public Ceased1739 Number Average Number Average Number Average
474 $36'081'000 253 $520'000'000 102 $4'929'000'000 370Data on serial VC‐backed M&A Public Ceased988 Number Average Number Average Number Average
386 $39'132'000 220 $624'000'000 55 $5'955'000'000 2321st comp VC‐backed M&A Public Ceased445 Number Average Number Average Number Average
147 $28'466'000 120 $900'000'000 30 $11'934'000'000 922nd comp VC‐backed M&A Public Ceased445 Number Average Number Average Number Average
202 $42'042'000 93 $617'000'000 20 $3'371'000'000 1073rd comp VC‐backed M&A Public Ceased128 Number Average Number Average Number Averageg g g
57 $54'251'000 18 $277'000'000 6 $2'324'000'000 394th comp VC‐backed M&A Public Ceased46 Number Average Number Average Number Average
23 $38'867'000 13 $165'000'000 3 $1'109'000'000 1223 $38 867 000 13 $165 000 000 3 $1 109 000 000 12
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A summary2’727 companies2’727 companies1’050 were VC backed150 were public in 2008
VC ($M) M&A ($M) Public ($M) Sales ($M) JobsStanford Start‐Ups 2'969 8'214 307'136 65'410 105'281 1991 Study (not including licenses)
1'842 75'406 185'175 171'579 454'082 including licenses)
WellSpring of Innovation (tech. only)
27'125 173'375 183'615 111'696 401'453
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 T 50 8'379 194'772 626'037 199'502 872'731Top 50 8'379 194'772 626'037 199'502 872'731 Top 5 5% 29% 66% 33% 63%Top 10 9% 43% 74% 42% 71%Top 20 14% 58% 83% 50% 79%
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Sales, jobs and public value in the table come only from the 153 public companies
Top 50 26% 76% 93% 57% 91%