Does being your venture’s “idea person” affect your initial role within the venture and the size of your equity stake?
Initial analyses of data from our 2007 Compensation Survey (the 2008 Survey is currently under way — see here to participate!) suggest that being the idea person can affect your role and the size of your equity stake. In this post, I delve into the impact on roles, and in the next post, I’ll delve into the equity-stake implications (IY”H).
Note: The analyses I present below are only descriptive and preliminary, and will be followed by more detailed/definitive regression analyses (which will control for differences in years of prior work experience, prior founding experiences, and other factors). Please post your thoughts on any data or statements below — I look forward to incorporating those insights into the regression analyses.
In the survey, we asked whether each founder had come up with the idea on which the venture was based. Within the IT survey, we received data on 324 founding teams encompassing 880 individual founders (for an average founding-team size of 2.7 people). Of those 880 founders, 412 were identified as being the “idea people” within the team, an average of 1.3 idea people per venture. As shown in the pie chart below, 81% of the ventures had a single idea person and 15% had 2 idea people.
Sliced another way, what percentage of people in each initial position were identified as the idea people for their ventures? Almost 85% of founding CEOs had been the idea person, 65% of the founding Chairmen had been, and 42% of the founding CTOs had been.
Any thoughts on how being the “idea person” affected (or is affecting) the roles taken by each founder in your ventures?
Up next, I’ll blog about my initial analyses of the “Idea Premium”: Do idea people get more equity than do non-idea founders? How much more?