Typical profile of a startup founder in the Czech Republic
When people hear the word “startup,” they often think of a young person with big dreams, aiming for the next Google or Uber. But what is the reality here?
To avoid the danger of labelling almost any young company as a startup, I focused only on Czech startups¹ that had previously received funding from a local VC fund or abroad. With this approach, I was able to collect data on 211 startups and 362 founders from the Czech Republic.
I searched for startups on the websites of VC funds and also in the great Czech Founders table. The specific number of co-founders was then mostly found in different articles, backgrounds of specific people on LinkedIn and startup valuations on Dealroom.
¹Even though this research was focused on the Czech Republic, there is also many founders from Slovakia who moved to Czechia and started a business form here. Therefore, it is fair to write about both Czech and Slovak startups even when speaking about the Czech Republic.
Startups in the Czech Republic as a men’s club (for now)
Although I was naturally aware of a certain bias towards the male population, I did not realize it would be this much. From the 362 founders, there were only 12 women (3.3%). Interestingly enough, this ratio is almost five times smaller than the percentage of global unicorns (startups with a valuation of over $1 billion) founded by women.
Solo founder vs. team
If we focus our attention to the global situation, specifically on the analysis of more than 300,000 startups by Ali Tamaseb from the book Super Founders, we find that while startups are most commonly founded by two people (28% of startups), a solo founder is present in roughly 20% of cases.
Thus, our local analysis goes one more time a bit against the grain when it showed that our startups were most commonly founded by a single founder, at 43.8%. Second place was a two-person team with 38.5% (see graph below).
I would like to emphasise that defining the term co-founder can often be very difficult. Therefore, for understandable reasons, this analysis only considers those who publicly appear as co-founders and not those from legal documents.
Experience matter (maybe)
Although there is a research from 2008 showing that the chances of success for a first-time founder is only 18%. According to LinkedIn profiles, more than 52% of Czech VC-backed founders received funding for their first company.
I have two main observations about this. Firstly, people don’t always put everything on the internet, especially if something doesn’t work out. So it’s quite possible that this number is actually much smaller in reality. And secondly, even though the position of founder is quite specific, there are many senior positions that can serve as very good preparation and are not included in this statistic.
On the other hand, when I was looking at the previous experience of individual founders, I expected to see more mafias — groups of founders or early employees from well-established companies (such as local Rohlík or Productboard). But the numbers were very small.
The most founders here have experience from Avast and IBM (10 in both cases), followed by STRV (6) and Seznam (4). There is also a significant presence of founders with consulting experience, in 22 cases.³
So we still need to wait a bit for a proper PayPal-level mafias to emerge.
³ Specifically, BCG, McKinsey, EY, PwC, KPMG and Trask.
Was Mark Zuckerberg an exception?
One of the most famous startup founders is undoubtedly Mark Zuckerberg. The genius programmer and founder of Facebook (now Meta), who dropped out of Harvard and instead went to think of a way to make contact with people while sitting in front of a computer screen. But is this really the typical scenario? Surprisingly, only 16.6% of founders from the Czech Republic have not completed the university education. 56.3% of founders have a master’s degree and 9.0% even have a doctoral degree.
The most sought-after field of study for founders at university is then computer science (43.2%), followed by economics (13.9%) and management (11.8%).
The most attended universities are VŠE (22%), ČVUT (21%) and Charles University (17%). From universities outside Prague, VUT and MUNI in Brno have the largest representation (7% each).
And now the valuations
It is certainly nice to know the counts for all previous data, but it would be much more interesting to see how the respective startups are valued. However, estimating the value of a specific startup just based on the information on the internet is a very difficult discipline — the relevant information is not usually public and everyone can have a slightly different view on the whole valuation process.
For this reason, I tried to find one source from which I could obtain an estimate of valuations for as many startups as possible. The Dealroom database seemed like the best option. We can find there estimated valuations of most of the collected startups, which are either derived from the last investment rounds or from other publicly disclosed information.
Because Dealroom always provides a range, I considered the average of these extreme values as the respective valuation. From 211 analysed startups, Dealroom listed valuations for 139 of them. However, it should be noted that these are really estimates that may not be updated in some cases and may not fully reflect the real situation. On the other hand, it is still a representative sample and the listed valuations probably represent one of the most accurate estimates we have available.
I therefore assigned to each founder the estimated valuation of their startups and tried to observe whether any criteria (education, field of study, university attended, number of companies founded or number of co-founders) would have a more significant impact on clustering startups with higher or lower valuations.
You can see how it turned out in the following graphs, where data from 3 Czech unicorns (Avast, Rohlík, Productboard) were not included for their large deviation.
Bonus: Do names matter?
Once I had the data on founders and startups collected, I thought of one last thing to focus on, just out of the curiosity — the names. Specifically, the most common founder names and the initial letters of startup names.
As for founder names, there was no surprise. The most common names fairly closely follow the general distribution of first names in the Czech Republic.
The distribution of the initial letters of startups was a bit more interesting. An unbiased observer might guess that the initial letter of a startup name is completely independent of the fact whether a given startup is successful or not. And so this distribution should be evenly distributed (except for generally little-used letters such as ‘Q’ or ‘X’ ). On the other hand, choosing an initial letter from the first half of the alphabet can ensure the first positions in many alphabetically ordered lists. Which is not a huge advantage, of course, but it can certainly bring a little more attention (Apple or Amazon btw).
For a comparison, I did the same analysis for the names of all current global unicorns, where the letter ‘C’ occurs most frequently. Other letters from the beginning of the alphabet are also popular, and similarly the letters ‘M’ or ‘S’.
For some reason, the letter ‘S’ clearly dominates the Czech startups, and is then followed by the letters from the beginning. Finally, for both Czech startups and global unicorns, it seems like the letter ‘J’ is not popular at all.
Although most of the results of this analysis falls into the category of “more or less expected”, it should provide a complete and unique view about the Czech founders that I haven’t been able to find anywhere else.
There are several notable observations worth mentioning:
- It is still too soon for a proper second generation of startup founders (mafias) to emerge.
- While having a co-founder is often recommended, solo founders in the Czech Republic appear to have more success. In my view, this may be due to a single strong founder being able to establish a clear direction for the startup to follow.
- More than half of Czech VC-backed founders have obtained a master’s degree. This suggests that there is no need to rush into starting a company, but gaining work experience while studying is surely beneficial.
- The majority of Czech VC-backed founders come from specialised business and technical universities (VŠE, ČVUT, VUT). This indicates to me still a great potential for promoting the “startup culture” within generally-focused universities and bringing together people from different backgrounds (UK, MUNI).