Over 70% of the founding teams from Atlas’ recent portfolio companies include a critical member(s) who is a 1st or 2nd generation immigrant.
A few MAJOR caveats on this data: I didn’t conduct a scientific study; it is entirely based on voluntary email responses from our CEOs. I haven’t heard back from the entire portfolio and don’t expect to. I also expect over the next few days to get a few more responses, so the number could change dramatically. I may have forgotten to email some portfolio companies; I was lazy and used a random email distribution list found by someone else here. I defined 1st generation immigrant as not born in the country where the company was founded and 2nd generation as son or daughter of an immigrant. The Atlas portfolio also has a lot of companies in Europe (which actually seems to bring down the average, which I wouldn’t have guessed.) Probably some other stuff too which makes this totally unscientific. But, still, I find it really interesting.
Even if this number comes down on a % basis it is still meaningful. I think it is really cool that talented people can move to places that have the best environment/ecosystem to start companies and try to make their vision reality. There is significant value to investors to be able to back the best people in the best locations; locations where there are other talented individuals, where there is access to customers and partners and where risk taking entrepreneurs are valued.
The companies created by these immigrants are also creating jobs. Often times these are highly paid positions. If an area is able to attract a critical mass of entrepreneurial minded professionals then new company formation becomes very “cool.” More people feel like they can take the risk and found a company… they have support system and see the examples of success.
For example, a study conducted by the Kauffman Foundation on the impact of MIT mentions that Massachusetts has benefited from foreign born students starting companies in the state.
More than 38 percent of the software, biotech and electronics companies founded by MIT graduates are located in Massachusetts, while less than 10 percent of arriving MIT freshman are from the state. More than half of the companies started by MIT’s foreign-student alumni are located in the U.S., creating their primary employment and economic impacts here.
I’m not sure that we were going to announce it yet, but it was picked up in the press and I saw that Jeff Bussgang tweeted it yesterday - Atlas and Flybridge recently invested in a company (DataXu) that fits this description perfectly. Technology out of MIT where a critical founder is not from the US; based in Cambridge, MA.
I think if we are going to continue to have centers of innovation that are the envy of the world then we need to get as many talented entrepreneurs here as we can. It seems to be working for Atlas, and I’m pretty sure it will continue to work for other venture capitalists in the US.
