Category Archives: Start-up data

Age and Experience of High-tech Entrepreneurs

Every other year I go to BCERC, an academic conference about entrepreneurship. Not only to listen to researchers but also to add my own contribution. (You can find my previous contributions with tag BCERC). It’s also a way to confront and share ideas and results with others. This year, I wrote a short paper about Age and Experience of High-tech Entrepreneurs. The slides are available on slideshare and here they are:

Age and Experience of High tech Entrepreneurs from Herve Lebret

The paper is available on SSRN. Why did I do this, well, you can have a look at the slides or even read the 15-page paper. But my point was to react to recent claims that high-tech entrepreneurs are on average about 40-year old. I was surprised and did my own analysis based on about 570 founders… and yes, the average age is about 38. But… the devil is in the details. It is sector-, time-, region- dependant. And even more surprisingly, the higher the value creation, the younger the founders. here are just a few tables as a quick conclusion…

GoPro proves start-ups can be hardware and successful

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GoPro just filed to go public (check here its SEC S-1 document). Its founder Nick Woodman is so unconventional that he is called the Mad Billionaire.

But what is really unconventional is the fact that a hardware company can still go public in the social media era. There are other unconventional features, particularly in the shareholding. Its founder and his father own together more than 40% of the company. The first developer still owns about 5%. Of course, the investors do not have as much… Silicon Valley is also known for the network strength so how is it a surfer could get the attention of the region? Because the GoPro cameras are great! Well this might not be all… Irwin Federman is a legendary VC, shareholder in GoPro… and Woodman’s stepfather…

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Lessons from Failure: a rare and interesting account from Everpix

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Two EPFL entrepreneurs asked me what I thought of the Everpix story. If you do not know it, you should read the following links:
– A very good article from the Verge: Out of the picture: why the world’s best photo startup is going out of business. Everpix was great. This is how it died.
– A very detailed account of the Everpix story by its founders on Gifthub with tons of documentation and archive: Everpix-Intelligence

I knew some actors: Pierre-Olivier Latour is an EPFL alumnus whom I met during my Index years and again in 2006 when I visited Silicon Valley with the future founders of Jilion. Neil Rimer, one of the investors in Everpix was my boss before I joined EPFL.

From left to right, Zeno Crivelli, Pierre-Oliver Latour, myself and Mehdi Aminian in 2006 in Silicon Valley.

The story will certainly feed the recurring debate about taking VC money or not, and I think it is a bias debate! You can read my recent posts about Founders Dilemmas, which address the issue:
– The Founder’s Dilemmas – The Answer is “It depends!”
– Swiss Founder’s Dilemmas
Again taking VC mmoney is not an easy thing. It is tough to get and when you have it, the constraints increase. You can watch the video Venture Capital Is a Time Bomb from the founder of 37signals if you do not know what I am talking about.

I think the debate is biased because it is not about VC vs. no VC. Not many entrepreneurs have the choice of not taking investor money (Business angels are not that different from VCs.) It is about do you want to have an impact and grow (then you often need investors) OR do you want to control and stay independant. And it is often OR not AND… I know many people (including entrepreneurs and investors) disagree with me. My recent experience has not changed this belief that I’ve had for 15 years.

You should read Founders at Work if not already. One of them claims: “VCs? you can’t live with them, you can’t live without them.” I think this is closer to the truth. He said exactly: “VCs are an interesting bunch; you can’t live with them, you can’t live without them. They are instrumental in your success because they give you money and a really strong endorsement. They have this mafia-like network of connections and they help you with deals and find the right executives. They are really working your case. In my experience, it rarely happens that they turn against you, because you’re a team and if the team isn’t working, the company will likely fail. Occasionally, when you’re a screw-up, they’ll have to make a tough decision and fire someone, but that’s rare in my opinion. Because they wouldn’t invest in your company if they didn’t believe in you and your team. So I’ve always had a good experience working with VCs.”

So back to Everpix. I do not really have a point of view as I did not know the details. But let me quote both actors from The verge article: “The founders acknowledge they made mistakes along the way. They spent too much time on the product and not enough time on growth and distribution. The first pitch deck they put together for investors was mediocre. They began marketing too late. They failed to effectively position themselves against giants like Apple and Google, who offer fairly robust — and mostly free — Everpix alternatives. And while the product wasn’t particularly difficult to use, it did have a learning curve and required a commitment to entrust an unknown startup with your life’s memories — a hard sell that Everpix never got around to making much easier.” “It succeeded in every possible way,” said Jason Eberle, who built the web version of Everpix, “except for the only way that matters.”

While the investors point was: “While the product was clearly superb and had a very small but very loyal following, we were not comfortable enough with the other aspects of the business to kick up our level of investment,” said Neil Rimer, adding, “Having a great product is not the only thing that ultimately makes a company successful.” There is the remaining issue of how much value creation VCs want and can all entrepreneurs address it: “You guys seem to be a spectacularly talented team and some informal reference checking confirmed that, but everyone here is hung up on the concern over being able to build a >$100M revenue subscription business in photos in this age of free photo tools.” Said a partner at another firm: “The reaction was positive for you as a team but weak in terms of whether a $B business could be built.”

The debate will no doubt continue, but it is close to what can inspire me this story. Not to forget the conclusion of Latour: “I have more respect for someone who starts a restaurant and puts their life savings into it than what I’ve done. We’re still lucky. We’re in an environment that has a pretty good safety net, in Silicon Valley.”

Swiss Founder’s Dilemmas

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Following my recent post about Wasserman’s book, The Founder’s Dilemmas, let me react about recent (and less recent) events related to Swiss start-ups and founders. Do we have here the same dilemmas Americans face, that is building a company which is either control-oriented or wealth-oriented? If you do not know what I mean, read the blog or let me just add that there is this binary model of either slowly creating value with your customers and partners with not much investor money or taking the risk of fast growth with investors, in anticipation of customer demand.

The ultimate example of this in Wasserman’s book is Evan Williams who founded Blogger, Oddeo and then Twitter, with diverse strategies. Paul Graham addresses the issue often (for example in Startup = Growth or in How to Make Wealth) and for a young entrepreneur, getting a million can be very important. At the macro-economic level, there is also a debate which I honestly never really understood. I think an ecosystem is (or should be) interested in fast growing companies, and slow growth should be less of a focus, not because it would not be important, but because it has always existed and will continue to exist with or without public support… However, because there are many SMEs in Switzerland, the support to small firms seems to be important. So is the situation very different from what I know in the USA? Let me try a simple description.

Sensirion is a very succesful Swiss start-up which is a good illustration of the debate. In an article written in 2008, its co-founder, Felix Mayer wrote about “How to finance the Growth? Being somewhere in the middle between the “US American” who is shooting for the moon and the Swiss who develops his technology on the cash flow of a one man company we did not choose the classical venture capital path to finance the first growth phase of the company but were able to find a private investor. In Switzerland, if you look for private investors, you may find experienced entrepreneurs who are willing to invest into a promising business. They are also known as “business angels”. It took quite a while to get from a prototype to a product family or from 1 to 10 to 100 as described before. You need knowledgeable and patient partners to survive this phase with many ups and downs. Usually, it takes longer than you expect. Nevertheless, at the end of the day, you have to get to the point where you generate growth by your own cash flow, which Sensirion reached 6 years after its incorporation. Since then, we generate enough cash flow to finance our yearly growth of around 30%-40%. In order to manage this growth we are of course continuously looking for excellent people!”

Is Sensirion a different model? I went to the Swiss register of commerce and looked at Sensirion financing (the Canton of Zurich is offering very detailed information). It was not an easy exercice and I am not sure about the accuracy (You will see the figures differ slightly!). I tried also to show the dilution of founders over time:

and here is Sensirion employee growth since its inception

Sensirion is clearly a success story, but is it that different from the US model? There might be no VC, but the private investor(s) have put a total of CHF13M with a valuation of CHF190M at the last round. The growth was as fast as many VC-backed start-ups, so I am not sure the investors were more patient and the exit might be less of a priority. This is very similar to many US start-ups… But Sensirion is often mentioned as an example that start-ups would not need venture capital (hence investors). There is not that much difference between a private investor and a VC (or is there?)

Now it is true that many of the Top 100 Swiss Start-ups raise very little money with business angels In the order of CHF1-2M. Recently EPFL’s Jilion has been acquired by Dailymotion for an undisclosed amount and the local press mentions Jilion had raised about one million. Optotune in Zurich is a similar model with 200’000 raised according to the register of commerce. Techcrunch was concerned recently about BugBuster (small) CHF1M A round. Dacuda raised about one million too at a CHF7M valuation. LiberoVision raised CHF200k with Swisscom at a CHF2.5M value before being bought for about CHF8M (it might have been more with upsides). Netbreeze was acquired by Microsoft after raising about CHF5M from one group of investors which owned 80% of the company. Wuala was acquired by LaCie 2 years after its creation and it was totally self-funded. And the list is nearly endless.

But there are also fast growing companies. Covagen, GlyxoVaxyn, GetYourGuide, InSphero, Molecular Partners, Nexthink, TypeSafe, UrTurn have raised a lot of money with VCs. And people who would say Switerland is about health related firms will see it is more diverse…

Company	Field	Money raised	Latest valuation	Investors
Covagen	Biotech	56M	NA	Gimv, Ventech, Rotschild
GetYourGuide	Internet	16M	50M	Highland
GlycoVaxyn	Biotech	50M	37M	Sofinnova, Index, Rotschild
InSphero	Biotech	4M	16M	Redalpine, ZKB
Molecular Partners	Biotech	56M	115M	Index, BB Biotech
Nexthink	Software	15M	NA	VI, Auriga
Sensirion	Electronics	13M	190M	Undisclosed
TypeSafe	Software	16M	NA	Greylock
UrTurn	Internet	12M	36M	Balderton

And of course, the founders have been diluted. I will not specifically show the dilution in each company but anonymously illustrate this with the data I could found online (non confidential data).

Company	Founders	Seed	A	B & Later	ESOP
1	9%		26%	65%
2	30%		33%	31%	6%
3	34%		32%	33%
4	40%	7%	12%	41%
5	43%		47%	10%
6	35%	11%	27%	28%

I am not sure, with all this data, that Switzerland is qualitatively that different… I will finish with an interview of Daniel Borel, the co-founder of Logitech: “The only answer that I may provide is the cultural difference between the USA and Switzerland. When we founded Logitech, as Swiss entrepreneurs, we had to enter very soon the international scene. The technology was Swiss but the USA, and later the world, defined our market, whereas production quickly moved to Asia. I would not like to look too affirmative because many things change and many good things are done in Switzerland. But I feel that in the USA, people are more opened. When you receive funds from venture capitalists, you automatically accept an external shareholder who will help you in managing your company and who may even fire you. In Switzerland is not very well accepted. One prefers a small pie that is fully controled to a big pie that one only controls at 10%, and this may be a limiting factor”

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The Founder’s Dilemmas – The Answer is “It depends!”

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The Founder’s Dilemmas is at the same time a fascinating and frustrating book. Fascinating because it’s providing very seldom seen (and mostly unknown) data about founders and high-tech start-ups. Frustrating because it is also seldom providing answers to the dilemmas founders may face. It took me the full reading of the book to finally understand that the answer Wasserman provides is that there is no best solution for a founder facing a problem, but that if he knows all possible situations, he might better decide based on his own motivation and … personality. So she or he might decide, not on rational criteria but more because of his personal inclinations!

The best illustration of this is Evan Williams who was a founder of Blogger, and then of Odeo (and then after the book was designed of Twitter). Williams had a very different behavior with the two start-ups. He was “control-oriented” with Blogger, hiring people in his close network, taking friends and family (and close network) money only and keeping management control to the point of firing everyone including his former co-founder and girlfriend. With Odeo, he had initially a “wealth-oriented” attitude, taking VC money and having a different hiring strategy. His inclination made him however buy back his investor’s stake, as he needed to control his start-up again.

Wasserman shows that the “3Rs” (Relationships, Roles & Rewards) are key features for decisions about the key dilemmas founders may experience. These dilemmas are classified according to the chapters of the book: Career, Solo-vs.-Team, Weak vs. Network, Positions, Compensations, Hiring, Investors, and Succession. Wasserman explains (or better-said describes) the various dilemmas founders face when taking decisions and shows that their decisions are very often dependent upon their motivation. Do they want to be Kings (power or control-oriented) or Rich (wealth oriented)? He does it with anecdotes (not so good and quite well-known) and with statistics (very good and not so well-known)

In summary I saw it more as a book for academics than for entrepreneurs and founders who apparently will not take better decisions after reading this book as they will be driven by their motivations, not their experience! At least they will be aware of it. It may be another illustration that youth and enthusiasm are as important as experience and rational behaviors!

One interesting puzzle Wasserman addresses is why individuals decide to become entrepreneurs, often thinking that they will become wealthy whereas this is entirely wrong. This has to do with control vs. wealth. You will need to read Wasserman if you want to know more.

Here are some more notes taken when reading. The next table is probably an essential part of the control-vs.-wealth dilemma.

Table 1.2 (& 11.1) – Wealth-versus-Control Dilemmas

Wasserman has many more interesting data and let me show a small sample:
– There are no real pattern in becoming a founder (age, experience, childhood influences, personality, family status, economic status), however early influences and natural motivations seem to be important.
– About age, he has seen a wide variation with an average of 14 years of work experience before becoming a founder (higher in life sciences). There is a specific group of founders with 0-4 years of experience.
– The main motivations are either control or wealth, but having an impact counts.
– Wasserman shows strong differences related to gender correlated with age. This is a must read but too long to be explained here…or are they, let me try [pages 33-35]

Tables 2 – Motivations of male and female entrepreneurs

– Ethnic homogeneity occurred 46 times more often than not (and still 27 times more often to control for family ties). And it diminishes conflicts risks, they are therefore more stable.

Size of founders’ teams

Founding with friends…
– 40% of teams had prior professional relationships and 17% family ties.
– Each such relationship added a 30% likelihood of founder departure.
– As a summary

“A friendship built on business can be glorious, while a business built on friendship can be murder.” [Page 104]

Jobs and Wozniak is a good example: they did not clarify crucial issues and “he got paid one amount, he told me he got paid another. He wasn’t honest with me, and I was hurt… But you know… he was my best friend, and I feel extremely linked to him.” They eventually parted ways. [page 109]

About decision making: “Two people at the wheel is the worst way to drive. You end up going straight when either a right or a left would be better.” A reason why being three might be good.

Equity sharing

Woman compensation
There is a much greater gap in the preponderance of women than in their compensation. Only 10% were C- or VP-level (17% in life sciences) and 3% and 7% were respectively CEO. But the compensation was 5% below.

Investors

On BAs vs. VCs, Wasserman shows the usual dilemmas. Dick Costolo about too many BAs: “It was a recipe for disaster. I had 13 people who, now that they had $20’000 invested, wanted to call me and ask about […], taking 45 minutes of the CEO’s time when he should be running the business.”

Succession of CEO

Conclusion

Wasserman strangely mentions here: “What is entrepreneurship? A widely used definition is a process by which individuals pursue opportunities without regard to the resources they currently control”. It sound even romantic, but it has a dark side: founders are 60 times more likely to be resource-constrained than have all the resources they need. Lack of resources lies behind all the dilemmas described. [Page 333]

Founders who had kept control held equity stakes which were [half] as valuable as those held by founders who had given up both CEO position and board control.

There are hybrid paths, compromises between control and wealth, using “second-tier” solutions (hiring, investors) but Wasserman shows it is even riskier. Consistent decisions give a higher likeliness of desired output (either control or wealth).
So the answer to dilemmas is “it depends.” Be knowledgeable about options and consistent in your choices!

Wasserman opens new directions for research:
– Who are these special animals which obtain both control and wealth (Gates, Ellison, Jobs 2.0…)
– Serial entrepreneurs: they receive larger equity stakes, remain CEOs longer, negotiate better investment terms and might be more successful. Are they?!! (cf Serial entrepreneurs: are they better?)
– How often is a control-oriented founder able to sell a start-up for which he owns 100%, for $5M and how often is a wealthe-oriented founder able to sell for $100M a company of which he owns 5%…
– Wasserman is aware all this is specific to high-tech and the USA. What about outside these boundaries?

“Any honest model of a complex human phenomenon has to acknowledge many unknowns”

I plan to come back on the Founder’s Dilemmans with a look at recent Swiss start-ups situation…

Silicon Valley unicorns on a map

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Twenty years ago, I loved the Silicon Valley high-tech maps which were regularly printed. You could see the density of famous start-ups around Santa Clara, San Jose, Cupertino, Mountain View, Redwood City or Palo Alto, cities which would be unknown and uninteresting outside the technology world. Just have a look at some examples in the end of the post.

When playing with Banksy’s adventures in NYC, I used Google for building a customized map. And a few days later, I thought about doing the same for Silicon Valley unicorns. Remember the unicorns are the rare companies which reach a $1B valuation. According to the 2013 SV150 there are 94 such publicly-quoted companies. Too much for an interactive map. So I did the exercise with the $10B+ companies (I found 23 with their roots in Silicon Valley).

Choosing the market capitalization is debatable. I could have taken sales or profits. Companies such as Electronic Arts, Juniper, Xilinx, AMD, nVidia would have appeared but the group would have been similar. I just add to choose. You can open the map directly in Google maps for a better interface.

Diplay Technology companies on a bigger map

Again there is something fascinating about this density. People claim the center of gravity of the region is moving north to San Francisco because of the web 2.0. This remains to be seen over the long term…

Lessons from Billion-Dollar Start-Ups: Unicorns, Super-Unicorns and Black Swans.

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A couple of colleagues informed me about Welcome To The Unicorn Club: Learning From Billion-Dollar Startups by Aileen Lee. I understand why. The article is closely connected to some of my main interests: high-growth start-ups and dynamics of entrepreneurs. Aileen Lee has analyzed start-ups in the Software and Internet fields which have reached a billion-dollar value while being less than 10 years old. She calls them Unicorns, whereas Super-Unicorns are companies which reached a $100B value!

All this reminds me of my analysis of 2700 Stanford-related start-ups (you can check Serial entrepreneurs: are they better? as well as High growth and profits) and to a lesser extent about the link between age and value creation: Is there an ideal age to create?

Aileen Lee has interesting results:
– out of 10,000+ founded companies per year, there are 4 unicorns per year (39 in the last decade – that is .07% of total) and about 1-3 super-unicorns per decade,
– they have raised more than $100M from investors (more than $300M for consumer-related). They may have been lean in their early days, but they grow fat!
– it takes 7+ years for an exit,
– founders have an average age of 34,
– they have 3 co-founders on average with a long experience together, often back from school,
– 75% of the founding CEO lead the company to an exit,
– many come from elite universities (1/3 from Stanford),
– pivot is an outlier.

I found this article interesting, important, and I even felt empathy and let me tell you why. We have a tendency to underestimate the importance of hyper-growth and hyper-fast. Growth is extremely important for start-ups; reaching $100M in value is a success. Looking at the small group which reaches $1B and then $100B is interesting. You need money for this (VC), you do not need that much experience but you need trust from co-founders. The founders of super-licorns seem to be the explorer of unknown territories. You need passion and resources.

On Unicorns, I have done a similar analysis in “Is there an ideal age to create?” I also have an average age of 34 for 1st start-up experience of all founders, and regarding Super-Unicorns which I call Black Swans (highly unpredictable outcome according to Taleb), I have identified 10 Super-Unicorns (see below) and there are 1-4 such companies per decade since the 60s. The average age of their founders is 28 and even 27 if I count the 1st experience.

[My Black Swans – Ancestor: HP (1939); 60s: Intel (1968); 70s: Microsoft (1975), Oracle (1976), Genentech (1976), Apple (1977); 80s: Cisco (1984); 90s: Amazon (1994), Google (1998); 00s: Facebook (2004).
Age of founders: HP: Hewlett and Packard (27) – Intel: Noyce (41) and Moore (39) (but they had founded fairchild 11 years earlier). Andy Grove was 32 – Microsoft: Gates (20) and Allen (22) – Oracle: Ellison (33) – Genentech: Swanson (29) and Boyer (40) – Apple: Jobs (21) and Wozniak (26) – Cisco: Lerner and Bosack (29) – Amazon: Bezos (30) – Google: Brin and Page (25) – Facebook: Zuckerberg (20) – Cofounder was 22.]

Now more data and statistics based on the Stanford-related companies. You can have a look first at my past slides and then I look at the Unicorn statistics.

Stanford high tech entrepreneurs-lebret from Herve Lebret

Basic analysis of Stanford-related unicorns

There are 3 super-unicorns in that group (HP, Cisco & Google). Out of 2700, there are 97 unicorns, which is a huge 3%! It probably means my sample is not exhaustive! Indeed Prof. Eesley estimates that 39’900 active companies can trace their roots to Stanford. This means now .2%. Now these are real exits whereas Lee includes private companies with no exit but a value provided by their investors. Whatever the ratio, unicorns are rare. Mine are less fat than Lee’s: they raise $30M with VCs.

I have less than 2 Stanford-related founders per company (but I do not count the ones with no Stanford link. It confirms Lee’s comment that many founders have roots back to school. It takes 8 years for an exit (fewer in recent years though) and 7 years for a graduate to decide about founding a company.

Unicorns and high-value creation is an interesting not to say important topic. Billion-dollar companies are not just a rare event, they tell us something about the impact of high-tech innovation & entrepreneurship. They are possible and desirable!

How much Equity Universities take in Start-ups from IP Licensing?

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How much equity universities take in start-ups for a license of intellectual property? It is sometimes not to say often a hot topic and information is not easy to obtain. However there are some standards or common practice. I have already published posts on the topic: University licensing to start-ups in May 2010 followed by a Part 2 in June 2010.

To oversimplify, I used to say that the license was made of 3 components:
– first, universities take about 5% post-series A (a few million $) or similarly about 10% at creation (investors often take half of the company at round A,)
– second, there is also a royalty based on sales of products using the licensed technology, about 2% but the range might be 0.5% to 5%. A minimum yearly amount is usually asked for, like $10k or more.
– third, a small but important detail: start-ups pay for the maintenance of the IP from the date of the license.

I decided to look at data again through the S-1 documents, which start-ups write when they prepare their Initial Public Offering (IPO), usually on Nasdaq. I found about 30 examples of academic spin-offs which gave details about the IP license. Here is the result.

(Click on picture to enlarge)

A couple of comments:
This was not an easy exercise and I would not claim it is mistake-free. You should read it as indicative only, hopefully it is mostly accurate! Assuming the data is accurate, universities own about
– 10% at creation or
– 5% post–series A (average: $5M)
– Universities keep a 1-2% equity stake at exit,
– Worth a few $M (Median is $1M)
With an average of $70M VC investment and market value in the $1B range (Median is $300M)
(Median values are as important as Averages).
Royalties are in the 1-4% range.
All this is consistent with information given in my prior posts!

You can also check the following Slideshare document

University Equity in Start ups for IP Licensing – Lebret – nov 2013 from Herve Lebret

Why was Netscape a weird example (to me) of Equity Sharing between Founders

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Marc Andreessen and Jim Clark, the founders of Netscape

You may not know I owe a lot to Nesheim’s High Tech Start Up, which cap. tables I took inspiration from. If you do not know Nesheim’s, let me just quote Steve Blank’s in his bibliography for 4 steps to the Epiphany: “High Tech Start Up is the gold standard of the nuts and bolts of all the financing stages from venture capital to IPOs”.

There was one such cap. table which was striking to me and I never mentioned it until now. Here it is now scanned from Nesheim’s book. I did not ask for authorization but I hope not to get in trouble!

Click on picture to enlarge

Do you see why I found it striking? If not have a look again. If not again, follow me for a few minutes. I decided to look for Netscape IPO prospectus, which I could find in two formats, an html IPO prospectus on the Internet archive as well as a pdf S-1 filing document. They give slightly different data, but I could build my own table as follows.

Click on picture to enlarge

And now? Well I had never understood why the two founders, James Clark and Marc Andreessen could have such a different amount of equity. How could it be a 10x difference even if James Clark was a more experienced entrepreneur (he was a former Stanford professor and co-founder of Silicon Graphics) and Marc Andreessen had no experience but was the author of Mosaic, the predecessor of Netscape as a browser. (Netscape is a sad illustration of bad relationships between a university – the University of Illinois – where a technology was developed and entrepreneurs, but this is another story.)

Well I found the answer thanks to the two documents: Jim Clark was
– first, a co-founder and both founders had 720’000 founders’ shares and
– second, a business angel: he invested $3M in the series A and then $1.1M in the series B. He got the equivalent of 9M commmon shares for his investment.

This comforts me in the general explanation I usually give about sharing equity between founders and then investors, managers, employees as you may see in Equity split in start-ups or on Slideshare. First founders split equity based on their non-cash contributions, then investments are taken into account.

After Neolane and Criteo, Supercell is the new European Success story

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I had heard about Supercell first last year, then again two weeks ago, and then again yesterday. Each time, it’s when I interacted with Finnish people, who were right to be proud of their new jewel! Supercell is the latest Finnish, therefore European success story. I had mentioned Neolane (because of its $600M acquisition by Adobe) then Criteo (which just filed to go public on Nasdaq) earlier this year, both are French and software companies. Supercell is the third high-profile start-up making the news in 2013. It is developing games just like Rovio or Mojang, two other Scandinavian start-ups.

Supercell has a meteoritic history: founded in 2010, it raised $12M in 2011, $120M 6 months ago and Softbank just acquired the majority of the company this month for $1.5B. More with my usual cap. table below. (In fact the reason I was told about the Softbank deal is because my Finnish friend had liked my new update of cap. tables data on Slideshare!)

Supercell is not so much interesting for the transactions than for its unusual (for Europe) history. It was founded by serial Finnish entrepreneurs. They have an interesting organization: people work in small teams, typically 5 people, called cells therefore the name Supercell. (This reminds me of similar structures at Apple and Google). They are very demanding with the game quality so that they launch a very small number of their developments. They celebrate failure (a stopped development) with Champagne where as they celebrate a launch with beer!

They revenues and profits are also meteoritic; just have a look at the revenue table below. Interestinggly enough Mojang is similar. “The success has turned Mojang into an overnight sensation in a matter of a few years, pulling in $90 million in profit last year on $235 million in revenue.”

Company	Founders	Seed	A	B & Later	ESOP
1	9%		26%	65%
2	30%		33%	31%	6%
3	34%		32%	33%
4	40%	7%	12%	41%
5	43%		47%	10%
6	35%	11%	27%	28%

Company	Founders	Seed	A	B & Later	ESOP
1	9%		26%	65%
2	30%		33%	31%	6%
3	34%		32%	33%
4	40%	7%	12%	41%
5	43%		47%	10%
6	35%	11%	27%	28%

Company	Founders	Seed	A	B & Later	ESOP
1	9%		26%	65%
2	30%		33%	31%	6%
3	34%		32%	33%
4	40%	7%	12%	41%
5	43%		47%	10%
6	35%	11%	27%	28%