In the last decade, amongst 113 Indian unicorns, only 22% were started by solo entrepreneurs, while the remaining 78% had two or more co-founders at the helm, according to a new study by PrivateCircle Research.
Notably, the fintech sector emerged as a hotbed for solo entrepreneurs, with 40% of solopreneur-led unicorns hailing from this domain, including heavyweights like CRED, Slice, and Digit Insurance.
The findings suggest that while solo-preneurs have proven their mettle in scaling businesses to unicorn status, investors seem to favour co-founder-led ventures. On an average, unicorns with co-founders generated 32% more revenue than their solo-founder counterparts, with the latest available figures for different startups pegging their average revenue at Rs 2,909 crore, compared to Rs 2,196 crore for solo-preneur unicorns, the report added.
Furthermore, the study observed variations in the central tendencies of funding raised by the two groups, indicating that co-founder teams tend to attract larger investment rounds. “Investors prefer co-founder-led companies and this could be a function of co-founders being able to tap a larger network of contacts,” explained Dr Murali Loganathan, director of research at PrivateCircle.
However, the solo entrepreneurial spirit has not gone unrewarded. Six unicorns led by solopreneurs have successfully launched their IPOs, while seven co-founder-led unicorns have made their way to the stock exchanges.
Loganathan highlighted that the higher average revenue of co-founder-led companies might stem from the complementary skills and broader networks that multiple founders bring to the table, potentially leading to more effective resource utilisation and greater business success.
The decision to go solo or partner with co-founders is a critical juncture for aspiring entrepreneurs. While solopreneurs enjoy greater control and avoid equity dilution, they often grapple with loneliness, limited networks and resource constraints. Conversely, co-founders can leverage collective strengths and connections but must navigate the complexities of shared decision-making and potential conflicts, the report added.