Radiography of 10 years of Europes ecosystem reveals significant disparity: Founders with higher education achieve 66% more investment than average
Between 2014 and 2024, the startup ecosystem in Europe has undergone substantial transformation. In a decade, its combined valuation has risen to USD 3 trillion
This growth has been driven by the interaction of various factors, from team composition to the influence of education, professional experience, and relationships with other associated entities.
A study conducted by NGP Capital (an organization that supports early-stage B2B startups, up to Series A in Europe and the US, with over USD 1.6 billion in active assets under management and investment in more than a hundred companies), analyzed the founders and their teams in order to better understand the development of new businesses.
In that context, the sample considered more than 17,000 startups founded between 2014 and 2024, involving 31,000 founders, to identify key patterns that have shaped the European technological landscape.
Educational level, directly proportional to capital raising.
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The educational level of the founders had a direct impact on their ability to raise funds. Founders with PhDs achieved an average of USD 34.1 million, 66% more than the general average, while those with MBA degrees achieved USD 30 million, a 46% above the average.
On the other hand, founders with bachelor's degrees raised USD 15.2 million, and those without formal academic training faced the greatest challenge, with USD 13.9 million.
Within that spectrum, universities from the United Kingdom led in the creation of startups and total fundraising. The alumni of Cambridge topped the list with $11.2 billion raised, followed by INSEAD ($7.6 billion) and Oxford ($7.3 billion).
Diversity: Key Fact.
The study highlights the importance of diversity within founding teams. Mixed-gender teams raised on average 25% more than exclusively male teams, reaching $26.9 million compared to the $21.5 million of their counterparts.
The exclusively female teams, however, faced a significant gap, raising only an average of $7.7 million.
Geographical diversity also played a crucial role. Teams with at least one international founder secured 44% more funding than entirely local teams.
This trend is more pronounced in the United Kingdom, where 39% of startups include international founders, followed by Germany (28%) and the Nordic countries (21%).
Team Size
The size of the team was a determining factor in fundraising. Teams with four co-founders raised 244% more than the average, reaching $70.5 million.
As the size of the teams increases beyond four members, fundraising tends to decrease, while solo founders face a 42% disadvantage compared to the average.
In addition, teams with mixed skills outperformed those with homogeneous profiles. These teams raised 43% more than the average, while teams led exclusively by technical or sales skills lagged behind, with differences of -2% and -65%, respectively.
Professional Experience and Entrepreneurship: The Importance of Track Record.
The report highlights the advantage of founders with professional experience in consulting. Those with backgrounds in companies like McKinsey managed to raise $14.3 billion, a 264% increase over the general median.
Teams with at least one founder with previous experience in creating companies also stood out, raising 45% more than teams of first-time founders.
While Silicon Valley tends to prioritize founders with a strong technological component, the European ecosystem favors academic pedigree and diverse skills in their founding teams. In Europe, the strength of your CV, your founding team, and your academic background are important, and while this unique combination offers a fertile ground for innovation and a wealth of opportunities for startups, the challenge for Europe's technological ecosystem is not just creating more successful startups, but also nurturing the next generation of technological companies and founders.
Bo Ilsoe, Managing Partner of NGP Capital
5 Points as a Great Summary
- A growing market: in 10 years, the startup ecosystem in Europe has reached a combined valuation of over $3 trillion.
- Education and Experience: Founders with advanced degrees, especially PhDs, outperform their peers in fundraising.
- The Importance of Diversity: Teams with gender diversity and international experience have proven to be more successful in fundraising.
- Team Size and Composition: Teams of four co-founders have the best performance, raising 244% more than the average. The most hard working: the solopreneurs.
- Geographic Drive: UK universities are leading in startup creation, with Cambridge, Oxford, and Imperial College standing out.
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