Are All Startup Founders Nepo Babies?

Discover how many founders have a family member who is also an entrepreneur.
Hazel Boydell
on February 24, 2023

Do most startup founders have an entrepreneurial parent, and does having a close connection to an entrepreneur impact a startup’s success?

As part of our assessment research, we survey founders of technology startups and scalable ventures and include the question “Within your closest circle of friends and family, who has an entrepreneurial background?” We ask the respondent to check all types of connections that apply.

We discovered that in many ecosystems, the majority of these founders have a friend or family member who is also a business founder. 82% of tech founders in 28 ecosystems surveyed said that they had at least one entrepreneur among their close connections. In 68% of these ecosystems, above 80% of such founders have a close connection to a person with an entrepreneurial background.

Where Do Founders Have the Most Close Connections?

Of the ecosystems analyzed, Los Angeles has the highest percentage of founders with a family or friend who is an entrepreneur, at 92%. 50% of the Los Angeleno founders surveyed report being second-generation entrepreneurs.

We also learned that 60% of respondents have friends who are founders and 53% have a family member who is also an entrepreneur. Is there an entrepreneurial gene? Unfortunately, we’re not geneticists and can’t answer that one, but we found that BostonLondon, and Phoenix have above-average family connections. In these ecosystems, more than 60% of founders surveyed have an entrepreneurial family member. And while an average of just 11% report having a sibling who launched a business, in Sydney more than double do—25% of respondents in the Australian startup hub have an entrepreneurial brother or sister.

How Does Being Closely Connected to an Entrepreneur Matter?

We can’t say whether knowing a founder influences someone to follow the same path, but being closely connected to other entrepreneurs is a key indicator of startup success. In fact, Startup Genome research demonstrates that startups with high Local Connectedness see 2.1x faster revenue growth versus those with low Local Connectedness.

A strong sense of community emerges in ecosystems with close relationships, and it’s the quality, not necessarily the quantity, of those relationships that can make all the difference to a startup succeeding. Physical proximity is less important than having high-quality, trusted relationships in which people share knowledge and assist each other—the kinds of relationships we tend to have with family members and people we consider close friends. Events and activities can help spark such relationships, but coworking spaces and meetups do not automatically build a true sense of connection or community.

If you don’t have a family member who founded a business, and even if you hate the idea of networking, attending some events and then putting the work into developing genuine friendships with even one or two other entrepreneurs could help your venture thrive.

So, are all startup founders the children of entrepreneurs? Only 38% of respondents reported having a parent who had launched a business. If you’re not one of them, rather than lamenting your lack of parental example or inherited business skills, seek out other founders in your community and create genuine friendships—it could be the secret to your startup’s success.

Data analysis and visualizations by Lucia Stefanuto. Photo by Karolina Grabowska.

Want to learn more about how connection influences startup success? Check out Startup Density as a Measure for Connectedness.

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