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February 2, 2011

Venture Funding For Start Ups: Numbers and Insights

Source: Mashable

Venture capital is also associated with job creation (accounting for 21% of US GDP),[1] the knowledge economy, and used as a proxy measure of innovation within an economic sector or geography. Every year there are nearly 2 million business created in the USA, and only 600-800 get venture capital funding.

In the United States, venture capital investment can be crucial for getting a company off the ground. But who are the entrepreneurs that receive funding for their startups? CB Insights, a corporate information and research firm, released a report this week examining the age, race, gender and education of founders who have received funding this year, and the results may surprise you.

According to the National Venture Capital Association 11% of private sector jobs come from venture backed companies and venture backed revenue accounts for 21% of US GDP.

When many of us think of an Internet company we might think of a Michael Cera type character holed away in his parents’ basement but the stats from the report show some interesting trends. Entrepreneurs in 2010 are a relatively homogeneous lot: Most are older than you think and yet only a fraction are black (1%) or female (8%). Still there is some hope that good-old smarts wins the day; 98% have an undergrad degree or higher.