The Pace of Scaling: Founding Team Heterogeneity and the Timing of Unicorn Status

This study explores how the founding team heterogeneity affects the time it takes for start-ups to achieve Unicorn status. While media and venture capital often emphasize the importance of diverse founding teams, empirical evidence on the impact of founders' heterogeneity on Unicorn success is limited. We analyzed 75 European Unicorns' founding teams. Data were collected from multiple sources, including CB Insights and Crunchbase. Independent variables included measures of heterogeneity such as prior start-up experience, managerial experience, career background, education level, education type, gender, age, and team size. The analysis examined how these founder heterogeneity dimensions influence the time-to-Unicorn status. The findings indicate that educational heterogeneity significantly affects the time to achieve Unicorn status. Specifically, higher heterogeneity in educational level is associated with longer time-to-Unicorn, while greater heterogeneity in educational type is associated with shorter time-to-Unicorn. Additionally, larger founding teams are associated with extended time-to-Unicorn, contradicting prior findings that emphasized the benefits of team size. This study contributes to the Unicorn literature by challenging assumptions regarding the universally positive effects of founding teams' heterogeneity. It extends human capital theory by highlighting that not all forms of heterogeneity are beneficial. The research suggests that educational diversity and team size must be strategically managed to balance potential growth benefits and operational complexities, offering practical implications for entrepreneurs and investors.