THE CHARACTERISTICS OF TECHNOLOGY ENTREPRENEURS
Thirty years ago, I was travelling around the country in a battered Vauxhall Cavalier interviewing founders of technology-based firms for my Ph.D study into technology-based entrepreneurship.
It was one of the first studies of this phenomenon in the UK and, at the time, was hardly on the radar of politicians and policymakers.
Fast forward three decades and now tech entrepreneurship is at the forefront of every economic strategy in the World.
Indeed, as last week’s column on the report “The State of European Tech” suggested, the tens of billions of pounds of investment going into tech companies across Europe is changing the industrial landscape in so many different ways.
As part of that report, a survey was undertaken of over 1,200 tech founders from across Europe and the results give a real insight into who the individuals are who take the plunge to start up their own businesses within technology intensive sectors.
First of all, the tech scene remains a white male dominated industry with only a fifth of these founders being female with the UK and Ireland having the greatest diversity of any part of Europe and France and the Benelux countries the lowest. Over eight of ten founders identified as white or Caucasian although the UK was again the most diverse nation with a fifth of founders belonging to a minority ethnic group.
It is worth noting that a quarter of the respondents described themselves as immigrants i.e. they have chosen to build their company in a country not the same as their country of origin.
More relevantly for a country which is leaving the European Union largely following concerns about immigration, over half of the founders of tech firms in the UK are immigrants.
By age, four out of ten start-ups have a founding team aged between 26-30 years old although 12 per cent are aged under 25, suggesting that a growing number of graduates may be moving directly from their degrees into starting a new tech business.
Given that these businesses are technology-based, it is not surprising that the founders had a high level of educational attainment with 75 per cent having a bachelor's or master's degree as compared to just 35 per cent of the European population that have gone to higher education. Seven per cent of the founders had also gained a doctoral qualification.
For those who had gone to university, it is fascinating that the founders have studied a diverse number of subjects and that being an entrepreneur without a technical qualification is not seen as a barrier to successful investment.
Perhaps what is most interesting of all is that contrary to perceptions that new technology companies is that they need high levels of investment either from business angels or venture capital, the study shows that nearly half of founders setting up for the first time start their companies with less than $25,000 (£20,000). Indeed, two thirds of founders financed their first companies through their own personal savings
However, those serial entrepreneurs who have previously been involved in starting other businesses will raise more money for their next ventures with a third of repeat founders raising more than $500,000 (£400,000) to set up and start their most recent companies versus 12 per cent of first-time founders.
In fact, securing access to capital remains one of the biggest challenges for 48 per cent of the founders of new businesses although it is worth noting that the second most important issue is that of balancing working and personal lives with nearly a quarter also suggesting they feel lonely at the top of their business.
And what is most surprising is that forty per cent of founders said that they had received no specific support from their investors to specifically help manage the pressures of being a founder.
Certainly, that is something that could and should be encouraged here in Wales, especially via the Development Bank of Wales which accounts for a significant proportion of investment into Welsh technology firms.