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Data: Solo Startups do Better Globally

The common perception is that a startup benefits from having at least two founders. A single geeky founder may ignore the business side, while one who’s good with business may tend to miss the importance of technology. So a combination of the two is often seen as ideal.

But that’s just a perception. CrunchBase, the online startup database, finds that single-founder companies do at least as good as, if not better than, multi-founder ones.
Of 7,348 global startups that have raised more than $10 million each in funding, 46% were ventures started by single entrepreneurs, says the San Francisco-based research firm. About 32% had two founders. The average number of founders in these successful startups is 1.8. CrunchBase also find that of the 6,191 ventures that secured some sort of an exit -through mergers and acquisitions, or sales -more than 50% were companies with a single founder. TOI could not obtain a large sample for In dia. Of the top ten funded startups in the country, startup analytics firm Tracxn found that three companies -Paytm, Hike and Ibibo -have a single founder.

Five companies, including Flipkart, Snapdeal and Ola, have two founders each, and only two have three founders or more.
Some might explain the difference between the global and Indian environments to the greater maturity of startups in places like Silicon Valley. Many who start up in mature locations may be doing their second or third venture and so have good insights into both business and technology. Perhaps the ecosystem itself ingrains the two aspects into entrepreneurs.

“The confidence that single-founder companies (in India) can scale has come only recently,” says Karthik Reddy, managing partner at Blume Ventures, a venture fund which invests in earlystage startups. He says Blume has struggled with single founders. “It’s not just us. The company faces the same question for the next funding round they raise. That’s why we look for a strong founder with a broader team,” he says. Norwest Venture Partners, which has invested in two-founder ventures like Quikr, BlueJeans and Pepperfry, says it’s difficult to generalize. “Google, Apple, Microsoft were all built by companies with two founders. In India, Infosys was built by many founders. Many may raise funding but if you want a resounding success, you need more than one founder. In a single-founder company, the whole burden falls on one person,” says Mohan Kumar, executive director at NVP India.

He notes that the chances of companies with two or more founders doing well increase when the startup goes through a rough patch. That worked well for Bengaluru-based self-rental car service Zoomcar, which was started by the American duo Greg Moran and David Back. Early last year, Back decided to leave the company for personal reasons and Moran was left holding the reins.

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