What a Typical Entrepreneur Looks Like [Infographics]
We often view CEOs as the rock stars of both the tech and financial worlds who handle huge sums of money and are at the forefront of the progress. Whether it is Leo from the film “The Wolf of Wall Street,” Steve Jobs being a hipster, or Elon Musk’s rebel image, the vast majority of bosses live rather mundane lives with a common pattern of preferences.
To pinpoint some crucial differences from regular workers, entrepreneurs have often made that decision based on not being willing to work in a regular position and perform shallow, repeatable tasks. The schedule could also be something they got sick of so that now they have a full freedom about how to manage their time.
But the fundamental contrast is the ability to maintain certain social skills to rule, negotiate, raise funding, and motivate workers to keep moving forward. Such people are more willing to take a risk, which is an inevitable part of the business: sometimes you just gotta put everything at stake.
The ability to adapt is also what discerns a true principal from a typical worker, a vital factor for any venture’s success.
Since we know their general perks, let’s break down some data about what a typical entrepreneur looks like:
The cliché of tech giants being established by individuals in their early 20s is still prevalent among all sorts of people. Mostly influenced by the examples of Mark Zuckerberg, David Karp, and Steve Jobs, the 19–21-year-old age range is kind of what we are used to expecting from successful startup CEOs. In fact, only 15% of them were younger than 29 (and only 10% for high-growth startups), while the vast majority is represented by a 35–43 group. Furthermore, the chance to launch a very successful startup grows with the age up until reaching the late 50s.
The average age among startup founders is 42, according to Business Insider, while high-growth ventures are launched at the age of 45, judging by the data. The 30–39-year-old age range is the closest competitor and is responsible for 39% of all the startups and 36% of their high-growth peers. It is narrowly followed by the 50–59 group that produces 30% and 33.5% of the value, respectively. The only group smaller than “the youngsters” is the most mature one: those who are older than 60 comprise 6% of the startups of both categories. This doesn’t come as a surprise given the proximity of retirement age and the overall leaning towards investing instead of managing for this category of people.
Unlike regular jobs, being a tech executive is a safe bet in terms of salaries, and they only get better if the ventures lean towards international businesses. With an average yearly salary of roughly $68K in the US, we can see a large disparity between the states, given how much bigger it is in California ($84.2K), a traditional place for tech companies to reside. An important fact is that almost 15% of them had to work a second job to make ends meet during tumultuous periods in their companies.
On the world’s scale, tech leaders seem to be less wealthy; however, it really depends on the local economy level. With the average income of $56K to $78K, depending on whether it’s Paris, Berlin, or London, executives may still be deemed as the upper class. But with an average of $30K a year, Eastern European countries view this category as the wealthy, on par with local politicians. This is, however, nowhere close to what the salary gap is between the countries at a basic labor level.
Following Bill Gates’ example, some may view education as a financial burden, which still isn’t true. Non-dropouts make up to 95.1% of all tech leaders, with 47% of them having more advanced degrees than a Bachelor’s. Moreover, while being in school, 30% of them were class leaders, and 52% were in the top 10% of all student rankings. This isn’t very different from the college period when 67% of the respondents were in the top 30 and 37% were on the “Top 10” lists.
With the recent Google manifesto leak, this has become quite a sensitive, yet intriguing topic in which different races and genders are represented among the tech bosses. Despite common perception, males aren’t the dominant force in this area anymore — judging by the data from the top 50 tech companies: males now make up 46% of the overall workforce. This is, however, heavily contrasted by the data among CEOs: men occupy 95% of the leading tech positions with 83% of them being white.
WIth a quite minor representation among the top entrepreneurs, women are responsible for being 40% of the new ones, which promises to narrow the gap between the genders in the nearest future. Moreover, female representation among the top companies has increased by 1–3% each year and will affect the entrepreneur ratio when they reach the higher ranks.
Funding is usually obtained within the usual stage format. Despite each entrepreneur having different ambitions and negotiation strategies, we can often break it down into the usual steps and figures:
This basic amount is usually done by the owner, friends, and family members. Startup accelerators can also add to the value and serve as an initial impetus to get the startup going. It is usually less than $1M but is capable of boosting the companies’ valuation by up to $1–3M.
It is now a more serious step to establish capital funding from outside investors during which some revenue may start generating. On top of the previous backers, it is complemented by the early-stage venture capitalists (VC) and helps the founders meet the next milestone of a roughly $1.7M injection and an increase in the valuation by up to $3–6M.
— Series A
By this point, the startup is supposed to generate revenue and clearly display it for potential investors. Marketing strategy and sales numbers have to be evident to attract further funding from VCs and the “super angels.” This is the stage where funding from these 2 entities severely increases and may reach the $10M mark and $15M in valuation.
— Series B
This is when the startup should also be capable of showing why it can work on a bigger scale. In theory, this step is aimed at not only expanding the products’ count, but should also allow for hiring more expensive executives, generating extra revenue streams, or even planning the potential buy-out patterns. The late-stage VCs can help raise up to $25M and increase the evaluation by up to a whopping $30–60M mark.
— Series C+
Like the previous stage, this category is aimed at expanding, but this time to completely different, new markets. It has basically no limit and can be named by any of the letters mentioned below. This is when the fiscal situation is out of the risk zone, and financial institutions such as banks and hedge funds come into play to invest around $50M and allow its value to increase by up to $100–120M. With the unlimited nature of this stage, series D, E, F, etc.can be responsible for all the possible sum variants.
The overall affinity towards the tech industry makes entrepreneurs digital product users. For example, nearly 50% of their small ventures rely on using social media tools as their online marketing campaign, while 71% of them are used to attract new customers and roughly 60% are the tools for driving up the sales. Big Data, being a prime tool for developing many businesses, is now responsible for around 80% of the tech companies’ research made and is now the best way to understand what consumers want and how to reach them. 68% of entrepreneurs tend to use Big Data analysis as the driving force for their marketing campaign.
According to FitSmallBusiness study, an entrepreneur is most likely from the US based on the GEDI 2017 index, and more than 6% of the population have their own business.
Self-funding is the general source for finances so that roughly 80% of ventures lack external investments at the early stages. The money from family and friends is the runner-up with around 10%, while banks and venture capitalists make up for the smallest groups to engage in launching startups.
The S-corporations are 43% of the startup market and is followed by LLC with 23% accordingly.
83.1% of entrepreneurs have started their businesses on their own, and only 11.3% of them purchased it from the established entities, while 2.8% inherited it from relatives.
On average, this type of job is exhausting: 33% of leaders work 40–49 hours per week, some work for 50–59 hours (30%), and there are some who are crazy enough to dedicate 60+ hours (19%).
This leads us to a conclusion: the average tech CEO is most likely white, male, in his 30–40s, has a decent, self-paid salary, is very dedicated to his job, and never hesitates to use social media or tools such as Google Analytics.
Does that mean that you can’t be one if you don’t fit any of these criteria? Of course not. The dicey nature of entrepreneurship makes the “playing by averages” game irrelevant. Also, the area itself is generally for outliers and is now represented by people of any race, gender, and socioeconomic background. Like in many other areas, it is shaping up to become an even playing field for everyone to enter and take over the ever-growing technological startups landscape.