Who are the leaders that will see tech through this downturn? As new waves of founders join veterans with previous downcycle experience, we take a look at their experiences and characteristics.
Introduction
Specter is proud to have partnered with Atomico for the State of European Tech 2022. Together, we utilized Specter's signals to provide insights on the current state of Talents and Founders in Europe. Key Findings Below 👇
The proportion of new founders with less than 10 years experience has risen from 27% to 50% in three years. In France, this number hit 63%.
More than half of founders and leaders have experience from multiple ‘eras’ of tech. 22% have worked at $1B+ companies, and 62% have previous downcycle experience.
Nearly 50% of European VC-backed tech companies have headquarters in three or more countries, compared to 30% in the US.
More talent than ever
Specter, an alternative data provider, generates data-driven insights into the profile of founders just starting out in Europe. Rather than tracking company formation, it captures when individuals make the leap to become founders, and provides a leading indicator of entrepreneurial activity. It also provides insights into the background and experience of founders starting companies in Europe today.
Tech: a default path for talent
Looking at this data, one interesting trend pertains to the career stage at which today's newest founders embark on their entrepreneurial journey. In absolute terms, the number of founders with more than 20 years of experience prior to starting their most recent company has remained remarkably stable across the past two years. However, their share of the founder pool has declined, as an increasing volume of less experienced talent is embarking on the entrepreneurship path.
In the first quarter of 2020, only 27% of new founders had less than 10 years experience, as tracked by Specter. By Q3 2022, these less experienced founders made up 50% of the new founder cohort. This growth speaks to an increased pull towards entrepreneurship among talent, and could also be tied to the 'great resignation' trend seen in the pandemic years.
Of course, the flip side of this inflow of new talent is that many founders today have only experienced entrepreneurship during an extended period of bull market conditions. These founders are set to be tested by their first experience of a downturn. This section of the report explores the profile and experiences of those building tech companies - and securing funding - in 2022.
Young founders abound in France
The trend of younger founders starting companies is visible throughout Europe. Across all countries and regions, the share of new founders with less than 10 years of experience has risen significantly quarter on quarter since the beginning of 2020. The trend is most notable in France, where the share of founders that started companies with less than 10 years' prior work experience hit 63% in Q3 2022 - the highest level of any European country. This compares to 53% in the UK, and 41% in the Netherlands.
In absolute terms, the total number of new entrepreneurs tracked by Specter has also continued to rise across the continent.
Learn more: State of European Tech 2022.
