Sam Altman believes there will be a 1-person company worth $1 billion. Will that company take venture capital?
Personally I think that company is still far in the future. But there's no denying the explosion of solo founders across startups in recent years. 17% of startups founded in 2017 had 1 founder. Fast forward to 2024 and that figure bounces all the way to 36%. Of course almost all of those solo founders take on employees as well.
The tricky part is getting VC investment.
While the overall percentage of companies with 1 founder has shot upwards, the percent of VC-backed companies with only 1 founder has trundled along in the 16%-19% range.
Potential explanations:
1. It's easier to start a company now than ever before, so more solo founders are trying it. Those folks are mostly still trying to raise from VCs but the investors remain less interested in solo endeavors.
2. More solo founders are being created 𝗮𝗻𝗱 𝗺𝗼𝗿𝗲 𝗼𝗳 𝘁𝗵𝗲𝗺 𝗮𝗿𝗲 𝗮𝘃𝗼𝗶𝗱𝗶𝗻𝗴 𝗩𝗖 𝗮𝗹𝘁𝗼𝗴𝗲𝘁𝗵𝗲𝗿, choosing to bootstrap their businesses.
Obviously it's likely a combination of 1 & 2 (plus our data only looks at companies on Carta, which implies the startup would like to give equity to its employees even if it doesn't raise VC - that's not every business).
The AI layer here is also important. As AI tooling improves, the barriers to company creation should continue to fall. Maybe this data points to the future where everyone is a founder of a micro-startup.
𝗧𝗮𝗸𝗲𝗮𝘄𝗮𝘆𝘀
Solo founders are much more common than they used to be.
VCs remain more skeptical of solo founders than founding teams, by and large.
The barriers to creating a company are in perpetual freefall.
Maybe this weekend is a good time to start up!
#startups #founders #VC #solofounders #bootstrapped
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