Black Web 2.0 has written about the importance of securing funding for Internet start-ups at various stages from the great idea to contracting the know-how to build it to the launch.
Private investment research firm CB Insights has released its first ever Human Capital Venture Capital report. In part one of the report, the company takes an in-depth look into characteristics of the founders of venture-backed companies including race, age and experience, and the number of founders per company. The study covers the first six months of the fiscal year (Jan-Jun 2010) and focuses on Internet companies that secured their first round of funding. To further narrow the study, the geographical locations are focused on The Big Three in Internet funding: California, Massachusetts, and New York.
According to the report:
- African Americans make up 1% of Internet company founders nationally.
- The majority of the black founders were part of an all-black founding team. As far as mixed raced founding teams, New York led the pack with 14% with California and Massachusetts bringing up the rear with a close 13%.
- The median amount of funding secured by an all-black founding team was $1.3 million, compared to $2.2M for a racially mixed team, and $2.3M for an all-white team.
- Asian teams secured the most funding with a median range of $4 million dollars.
While young prodigies often receive the spotlight for their exciting new start-ups, most companies are founded by those in their mid-thirties and early forties and many were CEOs or founders at some time. According to the report, nationally more founders fall into the 35-44 age range (48%), with 26-34 in second (29%) and 45-54 in third place (19%). The founders in the 18-25 range only make up 14% of the national number.
If you’re looking to find the next whiz kid, look no further than NYC. According to the report, 10% of New York founders are between the age of 18-25 while Massachusetts prefers experience to youth with 46% of its Web start-up founders falling into the 45-54 age bracket.
So what does this mean for burgeoning black techpreneurs with the next great Web breakthrough? If you’re a younger company, New York’s Silicon Alley might be the best place to start your business. With an increasing population of young start-ups setting up shop, NYC is the best place for a fresh-freshed talent to catch the eye of a potential investor. Overall, African Americans are still underrepresented in both the tech and entrepreneurial sectors.
To review the rest of the report click here and stay tuned for part two of the report.
Editor’s Note: CB Insights’ report findings are based on a sample set of 165 out of 185 companies that received their first round of venture funding during the first half of 2010. The definition of black follows the U.S. Census definition of the term.