Leadership or Money

An interesting article—as valid for nonprofit leadership as forprofit—that looks at a new report examining the demographics of entrepreneurial leadership.

An excerpt from the article from Fast Company.

“How often do we hear about how many millions of dollars a startup raised in this round or that? Venture capital is likely the most oft-cited figure for measuring the potential for a new business' success, but research firm CB Insights aims to change that misconception in a new report measuring human capital--not venture capital.

"When we ask venture capitalists what gets them excited about the young, emerging, and often unproven companies in which they invest, we never hear about deals and dollars," reads part I of the report, released this morning. "Rather, the first answer is frequently 'the team' or 'the founders.'" In their first-ever VC Human Capital Report, CB Insights attempts to apply the "same rigor we apply to our quarterly tally of deals and dollars to provide an objective, data-driven perspective into the people dimension behind the deals and dollars we so often read about."

“The study focuses on 165 early-stage Internet startups that raised VC in the first half of 2010, specifically looking in part I of the report at race, age, and experience of company founders. Are these the right characteristics we ought to use to measure start-ups? Is race a valuable or even appropriate metric? Here are some of the report's more interesting findings.

“In yet another illustration of the unfortunate disparity that exists in the U.S., CB Insights discovered that 87% of company founders in the past six months were white, whereas black entrepreneurs represent just 1% of founders and Asians 12%. What's more, close to 89% of founding teams are composed of a single race--83% are all white--while just 11% of startups were composed of a racially diverse staff.”