Do Founders Matter in Success of Start Ups?

According to a recent study, the attributes of a startup founder may not impact the success of a startup as much as venture capitalists have previously thought. A recent article in Institutional Investor stated: “In venture capital, the strength of a start-up’s founder and leadership team is considered the most important factor when deciding whether or not to back it. A new study, however, casts doubt on how much the founder actually matters — at least in the early stages.”

I find this startling. For as long as I can remember in my three decades of practicing venture capital law, venture capitalists have preached that investing in early stage companies is based on a similar mantra as the familiar one for real estate investing (location, location, location) but in the case of venture capital it was “management, management, management”. So many early stage companies start out with a business proposition that morphs over time. The “pivot” is a well-known business strategy for early stage companies as the product/market fit gets further defined. These pivots (yes many startups have many of them) are dependent on a strong flexible management team. How can it be that the attributes of the founders does not impact startup success? I think this area merits further study but in the meantime when I am analyzing startups for potential success, I think I am still going to base my bet significantly on the jockey and not just the horse!