Can non-technical founders succeed in Silicon Valley?

Last week, a recent college grad asked me: "How can a non-technical founder be CEO of a tech company?" I decided to explore the topic, and the results are surprising.

Obviously, phenomenal Silicon Valley-based startups have been founded by computer science majors. Larry Page and Sergei Brin (Google). Reed Hastings (Netflix). If you look beyond California, there's Bezos (Amazon) who studied computer science and electrical engineering at Princeton.

But many successful startups have succeeded without a techie in the founder, CEO role. They include well-known names like Alibaba, Lyft, Peloton, Stitchfix, and Box ...

40+ startups founded by non-techies ...

Box: Aaron Levie is the co-founder and CEO of Box. He dropped out of business school at USC. Box.com went public at $1.7 billion and today it is trading at over $3.3 billion.

Basecamp (37 Signals): With 2.8 million accounts, recurring revenues of ~$200 million and only ~50 employees, this is one of the world's most capital efficient companies -- founded by a non-techie: Jason Fried. To the venture world, Basecamp might look unsophisticated -- it operates as an LLC, not a C-Corp. It also operates without a CFO and without a full time accountant. Basecamp does have one investor though -- one -- Jeff Bezos (great story here: The deal Jeff Bezos got on Basecamp (written in 2017)). Jason earned his B.S. in Finance from Arizona and he started Basecamp three years later. He recruited excellent technical people an early employee who invented Ruby on Rails.

January 2016, Forbes estimated Basecamp revenues to be ~$144 million. Basecamp's revenue seems to have grown by up to 50% since then, and by 30% in the past 6 or 7 months if you extrapolate from the graph below which is published on Basecamp's home page.

Shipt: Acquired for $550M by Target. Bill Smith, the founder, didn't go to college. In fact, he dropped out of high school at 16, after which, he earned his GED. He's a remarkable entrepreneur as CNBC reported here: how Shipt started, then sold.

Bumble: Whitney Wolfe Herd attended Southern Methodist University where she majored in International Studies. She co-founded Tinder. After Tinder, she founded Bumble (in 2014) which gives women control over dating. In mid-2017, the app was adding more than 50,000 new users per day and today it's valued at more than $1 billion.

Stitch Fix: Katerina Lake. Unlike Bill Smith who dropped out of high school, she studied economics at Stanford before getting an MBA at Harvard. Stitch Fix went public and is valued at $3.1 billion as of August 2018.

SlideShare: While Rashmi Sinha was co-founder and CEO of SlideShare, it was acquired by LinkedIn for $119 million. Rashmi was trained as a Neuroscientist -- she had a Ph.D. At the time of acquisition, users had uploaded more than 9 million presentations, and the site had nearly 29 million unique monthly visitors. SlideShare had raised $3 million from Jonathan Abrams, Mark Cuban, Dave McClure, and Venrock.

Snap (Snapchat): The world's youngest billionaire in 2015, Evan Spiegel, studied product design at Stanford before leaving school early due to Snapchat's wild success. Snapchat started as a class project and it was ridiculed by his classmates. Entrepreneur Magazine published this: "Unlike Zuckerberg, while (Evan) may understand computers, he's no geek. Evan's story is remarkable and part of it can be read here on Wikipedia:

Lyft: Logan Green of Lyft studied Economics and got a BA from UC Santa Barbara.

Logan's co-founder, John Zimmer, studied Hospitality at Cornell.

Lyft's valuation hits $15.1 billion after recent $600 million in funding found. It's growing fast ... maybe due to it's non-controversial image or due to it's Amazon-like value pricing:

While Uber's private company valuation is 5X Lyft's currently (Uber = $75 billion), Lyft's value has still doubled in each of the past two years.

Rent The Runway: So far, Jennifer Hyman has raised $416 million for Rent the Runway. After about 10 years now, the company employs about 650 people. Jennifer earned a degree in social studies and then an MBA from Harvard.

YouTube: Chad Hurley, the founder / CEO of YouTube, was a designer from Indiana University of Pennsylvania. Chad studied graphic design in college but got interested in computers and taught himself some basic HTML and Web design. His moved to California during the 1999 Internet bubble where he became the sole designer in an encryption startup that later became PayPal. He went on to found YouTube which Google acquired for $1.65 billion. Good story here.

Stick.ai: Alli Mckee founded Stick.ai. She was originally educated in American Studies and Studio Art. In grad school she studied business -- at both Virginia and Stanford. Stick.ai, which has raised $1 million, is building a communication visualization platform that turns ideas into images, in real time, using NLP and machine learning. The ultimate goal to create a new whole new category of communication for business and education. 

Kickstarter: Yancy Strickler, the co-founder / CEO of Kickstarter and a William &Mary grad, explains why he hires liberal arts majors.

"Strickler’s road to Kickstarter was hardly a straight one. After graduating from W&M as a double major in English and literary and cultural studies in 2000, he worked as a freelance writer before being approached by Chen about the project," according to this Williams and Mary article. The article continued:

“I never wanted to be an entrepreneur,” Strickler remarked. “Creative writing was always my thing.”

From there it was another three-to-four years of gruelling work before Kickstarter finally got off the ground, and in 2009, the website was founded and running. Chen and Strickler got an office in New York, which they still occupy to this day. Starting with five employees, Kickstarter has since grown to include 65 employees, funding over 48,000 projects and raising over $775 million.

Pandora: Pandora's founder and CEO Tim Westergren was a composer for films and a musician. Pandora went public in 2011. It's market cap has tracked between $1.4 and $2.6 billion.

theSkimm: Danielle Weisberg (English degree from Tufts) and Carly Zakin (Poly Sci, Cinema Studies and Creative Writing from Penn) have raised $28.4 million to publish a daily newsletter. They say, "(theSkimm) simplifies the headlines for the educated professional who knows enough to know she needs more. They do the reading for you and explain it with fresh editorial content, breaking down what you need to know to start the conversation."

eBags: Acquired for $105 million by Samsonite -- after selling $1.6 billion of luggage online. eBags was started by a group of marketers, including myself, in 1998. Peter Cobb (Oregon shirt), Eliot Cobb (right chair), Andy Youngs (gray shirt), Frank Steed (stripes) were my co-founders. Frank was educated as an aerospace engineer -- but none of us wrote any code for what we called our bit-trading, data-dipping, page-morphing bag store.

Despite our lack of computer experience, our eBags team was good at building hundreds of relationships, adapting to changing trends, and hiring tech talent. Our first hire at eBags was Mike Frazzini as VP of Technology.

CircleUp: Ryan Caldbeck has raised $54 million so far. Helps consumer products raise money ... it started a bit like Kickstarter.

• CircleUp writes: "There are 28 million small businesses in the (U.S.). (Most) are hidden from investors—too small for private equity firms, not yet suitable for traditional bank loans. We are using data and algorithms to bring transparency and efficiency to the market. With better information comes better decisions, and better decisions yield better outcomes for entrepreneurs, investors, and industry players alike. The result is much more innovation, which improves what we eat, drink, wear, put on our skin, and how we live our lives."

TurnCommerce: Bootstrapper, Jeff Reberry, left eBags to start TurnCommerce. The business is a proven industry leader with over 1,000,000 domains managed and over 1 billion DNS requests per day. Jeff studied business at CU Boulder and then worked in marketing at eBags. His startup team included a number of ex-eBaggers.

TurnCommerce's job openings prove that the business is quite technical:

• Senior Front End Web Developer - Angular Location: Denver, CO | Department: Engineering 
• Senior C# - Backend Automation Engineer Location: Denver, CO | Department: Engineering 
• Senior C# - API Developer Location: Denver, CO | Department: Engineering 
• C# - Programmer / Developer Location: Denver, CO | Department: Engineering 
• Full-Stack Web Developer Location: Denver, CO | Department: Engineering 
• JS/CSS Front-End Developer Location: Denver, CO | Department: Engineering 

Apple: The most valuable company in the world was founded by Steve Jobs and Steve Wozniak on April Fools Day in 1976. Neither had finished college. When Wozniak was asked, "Does Steve Jobs know how to code?" Woz responded:

Steve didn't ever code. He wasn't an engineer and he didn't do any original design.' He was, however: 'technical enough to alter and change and add to other designs.'

That said, Jobs did admire talented technical people like Steve Wozniak. In addition, Jobs had an ability to attract and hire them as described in this 2:36 minute video:

Another 3 minute video on what types of people Steve Jobs wanted to hire:

Apple co-founder, Wozniak, was the computer guy. After high school, Woz enrolled in the University of Colorado Boulder but was expelled during his first year for sending prank messages on the university's computer system. In 1969, Wozniak returned to the Bay Area, then helped launch Apple 7 years later. After Apple, Woz enrolled at UC Berkeley to complete his degree. Jobs never returned.

Eventbrite: Julia Hartz is the 13 year founder / CEO of Eventbrite which has raised $332.3 million. She studied telecommunications at Pepperdine. Eventbrite is the world’s largest self-service platform for live experiences. It's generated billions in gross ticket sales, processing over 2 million tickets per week in 180 countries.

Peloton: John Foley, co-founder and CEO of Peloton Interactive, does have an industrial engineering degree. His startup, today, is valued at about $4 billion. In full disclosure, I've riden a Peloton for almost 3 years now as @Jon_Nordie and absolutely LOVE it. It's addicting. Peloton is worth $4 billion now. I think it will easily surpass $10 billion.

John rose up the ranks through operations type roles before going to Harvard Business School and becoming a general manager of Ticketmaster and president of Evite. His stint before Peloton was done at Barnes & Noble as its digital head.

Minted: Mariam Naficy earned a BA in Political Economy from Williams College prior to earning an MBA at Stanford. She is the founder and CEO of Minted.com which has raised $89.1 million. In the early dot com days, Nancy was a co-founder and co-CEO of Eve.com which raised $28 million was sold in 2000.

Zynga: Mark Pincus studied finance and sociology in Pennsylvania before earning an MBA from Harvard. He founded four companies, the last being Zynga which went public and is trading for $3.4 billion in August 2018.

Chewy: Ryan Cohen and Michael Day -- two scrappy entrepreneurs -- built Chewy.com from scratch and sold it six years later for $3.35 billion to PetSmart. Neither graduated from college.

Although neither founder studied computer science formally, both were driven to pursue entrepreneurship and technology interests, as this Forbes Article stated:

CEO Ryan Cohen and CTO Michael Day launched the company in 2011, after meeting in a Java chat room. Cohen, 31, was working in affiliate marketing ... and met Day when trying to find a programmer for his website. Day dropped out of the University of Georgia to help him and eventually the two put $150,000 of their own money into an online jewelry startup.

After ditching the jewelry business, Cohen and Day collected what was left in their personal bank accounts and started buying pet products from distributors. Once they found a third-party fulfillment center in Pennsylvania, they launched the site and matched the online prices of competitors.

Within a year of the PetSmart acquisition, PetSmart's CEO is gone as is Ryan (Chewy's CEO). Publications like Bloomberg are now saying that PetSmart is "drowning in debt" -- $8 billion of debt.

SmartGift: Monika Kochhar studied business and economics at Mount Holyoke College and later at London School of Economics. Before becoming an entrepreneur, Monika was trading tech on wall street (JP Morgan, Goldman Sachs, Dresdner, BNP). SmartGift, 3.5 yrs old, has quickly risen to the top as a leader in customer experience and innovation for gifting. SmartGift's tech platform includes companies like 1800Flowers, TUMI, Cole Haan, Tory Burch among others.

BlueNile: Mark Vadon studied social studies at Harvard and then got his MBA from Stanford. He jumped from consulting (Bain) to the founder / CEO role at BlueNile.

Hiring a strong technical leader -- Darrell Cavens -- was critical to BlueNile's success. Mark and Darrell, BlueNile's CTO, rejoined each other a few years later to found Zulily where Darrell was CEO and Mark was Chairman. Mark has an eye for big exits -- he's been an instrumental investor and advisor to startups like BodyBuilding.com (acquired by Liberty Media) and Chewy.com (chairman when acquired by PetSmart).

Tinder: Sean Rad of Tinder studied business at USC. Tinder, the dating app, is valued at somewhere around $3 billion as noted in the August 18, 2018 ReCode article below.

LSNR: Rodney Williams has raised $14.4 million for LSNR which moves data over audio (even for payments). Rodney has earned BA, MS, BBA degrees in addition to an MBA.

GiveBackBox: Monika Wiela, who grew up in Poland and moved to Chicago with just a few dollars in her pocket, has an inspiring startup story (watch the video below). A natural go-getter, she singlehandedly forged a partnership with Amazon. She has an advanced degree in marketing.

Be sure to watch this inspiring interview Forbes did with Monika:

Sawyer: The founder, Marissa Evans Alden, studied Human Development at Cornell before getting an MBA from Harvard. She's raised $7.5 million for Sawyer which "connects children and providers of enriching childhood experiences through a suite of industry-leading technology solutions." Marissa was Head of Radical Innovation" at Rent The Runway prior to starting Sawyer.

AllPosters: At dissertation stage, Michael Heinstein quit his Ph.D. program in Chicago --- psychology -- to start Art.com. Mike convinced a friend who was writing software at Visa to quit his NYC job and co-found AllPosters. As founders of Allposters.com, they couldn't raise money -- outside of Mike's grandma who invested $5,000 -- largely because Benchmark and Sequoia (well-heeled VCs) had already funded Art.com to the tune of $12 million. In a twist of fate, after spending a few years working out of their bedrooms, the embattled bootstrappers built an incredibly profitable business (with more than $150 million revenues) and they acquired the bankrupt Art.com (which was no masterpiece, as this article proclaims). They ultimately changed the company's name from Allposters.com to Art.com.

Mike never really had a "real job." As part of acquiring Art.com, Mike sold a large stake of his stock to Venture Capital firms. In 2010, he left the CEO role in 2010 and basically retired.

Jet.com and Diapers.com: Marc Lore is a graduate of Bucknell University where he earned a BA in Business Management / Economics, cum laude. He also studied for an MBA at the Wharton School of the University of Pennsylvania. Diapers was acquired by Amazon for $550 million, then Jet.com was acquired by Walmart for $3.3 billion.

Strava: Mark Gainey, co-founder and first CEO of Strava, earned a Fine Arts degree from Harvard. Strava has raised $41.9 million and it is used by millions of fitness enthusiasts. In 1996, he was co-founder and CEO of Kana Communications.

Domo and Omniture: Josh James left Brigham Young University in 1996 just before graduation. He founded Omniture which was acquired for $1.8 billion by Adobe. "Omniture was the number one returning venture investment out of 1,008 venture capital investments in 2004, as well as the number two performing technology IPO of 2006," as Josh's website states. After Omniture, Josh started Domo which has raised $690 million, so far.

In 2016, Fortune magazine published: "As a successful technology company leader and innovator, Josh James is not a technologist himself. He didn’t write code or graduate from MIT with a computer science degree. When he went to college at BYU in 1995, he didn't know anything about Windows 95 was or even Microsoft itself. When he was in his junior year at BYU, he had the good fortune to get to know John Pestana who was a technologist and who would later help write the code and become co-founder of Omniture with James." Fortune continued:

While still in college, the pair started a company building websites for businesses and developed that into a successful and profitable enterprise. And then their customers started asking questions about how to measure the success of their websites. They tried to install software that was available at the time, but it would crash the sites if traffic spiked. So they decided to build it themselves.

And that was how Omniture came to be.

TheMuse: Kathryn Minshew is the cofounder and CEO of TheMuse which has raised $28.7 million. With $3,000 and a team of volunteer writers, Kathryn launched an online career-development tool for professional women, in 2011. Her formal training post-HS was in political science.

Even though Wired Magazine wrote in 2017 that Kathryn ...

... doesn’t have a technical degree, although she was a top computer science student who aced the advanced placement exam for computer science when she was in the tenth grade at Thomas Jefferson High, a prestigious math and science magnet school in northern Virginia. For fun she and her friends used to pass notes in class that they’d written in computer programming languages, but she never saw herself going into tech as a career. That was something for guys who lived in their parents’ basements.

She opted to study French and political science at Duke.

NerdWallet: Nerdwallet never raised money -- like Basecamp. Tim Chen, founding CEO in 2009 (and still CEO), was a financial analyst. Inspiration came to Tim when he needed a new credit card. He set up a spreadsheet of ~1,000 offers. Friends and co-workers started asking him for credit card advice ... and NerdWallet was born. This bootstrapped company employs about 400 today.

It gets roughly 15 million visitors per month:

Tim's co-founder was Jacob Gibson, a JPMorgan Chase banker. While Jacob was a business person before co-founding NerdWallet, he did graduate from MIT where he majored in math and management science. He and Tim probably complemented each other's skillsets. Today, Jacob is Nerdwallet's COO.

AirBnB: Named Airbed and Breakfast early on, 2 of the 3 founders including the CEO (Brian Chesky) attended the Rhode Island School of Design where they received Bachelor of Fine Arts degrees. Joe Gebbia was second other RISDE grad. In May 2018, Forbes wrote: "As A Rare Profitable Unicorn, Airbnb Appears To Be Worth At Least $38 Billion."

This 6 minute video, an interview of the casually-clad, office-less, relentlessly resourceful founders, illustrates AirBnB's in 2009 culture. It was starkly different from its much larger competitors like Marriott and Starwood that were born during a different generation:

As you might have noticed in the video above that AirBnB did have a third co-founder: Nathan Blecharczyk. Nathan studied studied computer science at Harvard. Success of a non-tech co-founder / CEO can lie in his or her ability to work alongside a technical co-founder like Nathan. Or success can lie in hiring a strong technical leader early on as eBags did. Or as BlueNile did with Darrell Cravens who went on to found Zulily.

Artifact Uprising: Jenna Walker bootstrapped Artifact Uprising until it was acquired by Oakland CA's VSCO?, an art and technology company that empowers creative expression around the world. VSCO has raised $70 million. Jenna studied business at the University of Wisconsin.

Evolve: Evolve, a platform that maximizes rental income, has raised $103 million, with $80 million of it infused last week. It's founder-CEO, Brian Egan, studied psychology and philosophy at Boston College before getting his J.D.

Simple Habit: Yunha Kim is on her second startup. After graduating with an economics degree from Duke, then starting and leaving Stanford, this non-technical founder started and sold LOCKet to Wish.com after Wish had achieved a $3 billion valuation. Yunhan went on to start Simple Habit which empowers humans to stress less, achieve more and live better. Yuhna took Simple Habit to Shark Tank where she rejected an offer of $600,000 for a 15 percent stake from Richard Branson (a guest on that week's show) and Robert Herjavec -- she leaving without a deal, on her terms. As of today, the company has raised $2.3 million and it employs about 20 people.

Forbes has recognized Yunha in its 30 under 30 list for consumer technologies:

Warby Parker: Neil Blumenthal studied history and international relations at Tufts before going to The Wharton School for financial schooling.

His co-founder studied bioengineering (which is technical) before going to Wharton like Neil, but he didn't concentrate on computers are coding.

PayPal: Peter Thiel, a Lawyer with a BA in Philosophy, was co-founder and CEO of PayPal. PayPal was established in December 1998 as Confinity which developed security software for handheld devices. Co-founders were Peter, Max Levchin (Ukranian computer scientist), Luke Nosek (U of Illinois trained computer scientist), and Ken Howery (an economist). Confinity merged with X.com, Elon Musk's company, and the combined entity became PayPal.

As an aside, Elon has degrees in economics (Queens) and physics (Penn), but he's a self-taught computer programmer who started programming at 12. He began a Ph.D. in applied physics and material sciences at Stanford University in 1995 but dropped out after two days to pursue an entrepreneurial career. 

After PayPal, Peter became a tremendously successful tech investor (LinkedIn investor and the first investor in Facebook).

Peter Theil's book, Zero to One, is outstanding, too, for those who haven't read it, yet.

Alibaba: Eighteen people founded Alibaba in 1999. Today it has a $460 billion market cap. Jack Ma, a former English teacher, was (and is) the leader.

The value of his stake in Alibaba grew dramatically over the past two years:

Like many other companies discussed in this article, Jack Ma was able to recruit strong technical partners, though, as part of the founding team:

Co-founders made significant contributions to Alibaba. One was Wu Yongming who graduated from Zhejiang University of Technology. He was responsible for web design and development at the time.

But, back to the topic of non-technical founders starting tech companies. Jack Ma says, he ...

learned more from his and others' failures than through the traditional channels of education.

As he declared in an interview with Charlie Rose in Davos, "I failed a key primary school test two times, I failed the middle school test three times, I failed the college entrance exam two times and when I graduated, I was rejected for most jobs I applied for out of college.” Ma was the only one out of five applicants to the police force to be rejected and ...

,,, the only 1 of 24 to be rejected by KFC ... 

"I applied for Harvard ten times, got rejected ten times ....’" In the late 1990s, after starting Alibaba, Ma tried to get ($3 million in) venture capital funding in Silicon Valley for Alibaba and got rejected.... He eventually went back to China without funding.

Jack Ma was called crazy.

But now, he advises other entrepreneurs to hire the crazy ones.

Steve Jobs might have agreed:

Not all startups created by non-techies turn out so well (despite the valiant efforts)

Two examples:

Tilt: This startup -- which was hyped -- is actually a boom to bust story. It boomed when it got funded with $37 million and was used by ESPN to let Fantasy Football players put together a prize pot. It also ended up being acquired at an alleged bargain basement price by AirBnB as you'll see below.

Its non-technical founder, James Beshara, studied economics at Wake Forest and the London School of Economics. He also passed through Y Combinator, like AirBnB did.

After entering Y Combinator, James brought on a technical co-founder, Khaled Hussein, where the team created a system for letting anybody pool money together for anything — parties, meals, houses, whatever. The concept seemed strong enough to secure big venture funding, but over time, it became difficult and then AirBnB absorbed it ...

Teespring: This company, which raised $61 million, was started by Walker Williams (BA in history from Brown) the year before he graduated. Teespring went through layoffs and was recapped in May 2017 -- not a good thing for shareholders. Co-founder, Evan Stites-Clayton, was the technical co-founder (BA in Computer Science from Brown), and after about 9 months after the recap, Evan left the company.

Teespring still gets a lot of traffic -- about 13 million visitors per month:

Despite high levels of traffic, Teespring hit rocky roads financially, did layoffs, and went through a painful recap in late Spring 2017.

Regardless of a founder's background, raising a lot of money can hide a lot of sins, short term. High growth can hide a lot of sins, too. Like we'd say at eBags during the 2001 dot bomb:

"Too much money can make you stupid."

Money can also enable a company. Capital, though, requires care. Even if world-renowned investors like Teespring's (below) are backing a startup, it can go belly up or be recapped:

Bottom line: 2 in 3 Tech Startups might be founded by non-techies

Successful startups can be founded by technical or non-technical founder / CEOs. How many are started by non-techie ones is not fully known. But one 2014 NYC study by Endeavor showed that about 2/3rds of tech startups are founded by non-Computer Scientists and by non-STEM-oriented entrepreneurs:

The study above involved a review of LinkedIn and Angel.co profiles, plus 700+ interviews. And while it can't be applied to the universe of startups, it might be directionally accurate. Founders were more likely to study political science than math.

Summary and Key Takeaways:

So, can non-technical founders be successful in Silicon Valley? Absolutely. Yes.

If you are a non-technical founder, though, here are some insights:

• Non-tech leaders need to be good at attracting technical talent.
• Great leaders need to realize that great startups are built by teams. Teams with diverse skill sets. Teams that divide and conquer.
• Great startup leaders look at tech through the eyes of consumers or non-techies. Non-technical founders are naturally included to do this.
• Founders can come from any walk of life. The list above proves that a non-technical (or technical) founder-CEO can be male or female, a high school drop out or a Harvard-Stanford duo-grad, a 20-year-old or 50+, an immigrant or American-born. At Iterate.ai, my current startup, fewer than 25% of us are American-born (me being one).

• Maybe the most common thread across all entrepreneurs is a tolerance of ridicule and rejection. That trait is more prominent than certain type of college degree. This tolerance of ridicule may be an innate character trait. There are countless stories about how much rejection most entrepreneurs have endured.

• Paths to success are often non-linear. Some people believe that many successful startups are a product of Complexity Theory. Complexity Theory doesn't usually work as an operating principal in large companies. That's one reason why AirBnB wasn't started by hoteliers -- and maybe that's a reason why computer scientists don't necessarily create every tech company.

Whether you are a tech-educated founder or not, the stakes are high in the startup world:

• No matter your education, your business will be held to the same high standards. Every startup needs to become profitable (or be acquired pre-burnout). Until it's profitable, a startup is a venture (not really a business).
• Ultimately, a startup is aimed at fixing an existing inefficiency or problem -- it's not just a technical tool. This might be a reason why leadership requires a combination of technical and business talent which can come from a few people (Jobs and Wozniak) or just one (Bezos). In the case of Alibaba, Ma played the role of the non-techie founder:

• Raising a lot of money doesn't mean long-term success. VC backed startups fail at a rate as high as 75%. Well-funded startups like Tilt and Teespring can struggle or even die (like Digg.com) if they don't turn a a profit before burning through their cash. Early on, money buys time. Money also buys a good PR agency. But, in the end, raising money can just raise the hurdle for success. A business is just a venture until it turns a profit like Basecamp, eBags, and Nerdwallet did.

• Raising money means you owe more money to more people. The stakes go up. The obligations become greater. Preferences associated with preferred stock agreements can make it more difficult for stock options to become valuable. Raising money often creates bigger Boards of Directors, too, and the decision making can become more complicated. That said, raising money can be good -- it can attract excellent talent, pay for marketing campaigns, and more ... but it's not always good ... handle with care.
• Look at the graph below ... about 2 or 3 startups do NOT return some portion of the money -- or any of the money -- back to Venture Capital firms. 65%!

• In a case where a startup is sold for 1X the money raised, the founders typically get $0. That's true when the Preferred Shareholders get a 1X preference. When a VC has negotiated a 2X or 3X preference, the VC may get 2X their money back before the founder or the employees get a dime. As a result, most entrepreneurs lose it all -- more than 2/3rds of them -- even after that "thrilling moment" of getting funded. Techie and non-techie founders beware.
• Some of the startups that raised the least amount of money are among the most successful: Basecamp, Allposters, and Nerdwallet. Don't ignore the quiet, well-run, bootstrappers.
• Unfunded startups tend to get acquired at a much higher rate that funded ones. This is why my current company, Iterate.ai, helps large organizations zero in on the most secretive or hard to find, unfunded, startups (in addition to the funded ones).

• Getting a lot of press doesn't mean success for any type of founder. Hype is just hype. Again, Tilt and Teespring serve as examples.

I hope you enjoyed this article. Please tell me who is missing from this list of non-technical founders ...

This article was written by me ([email protected]). I'm a non-technical co-founder. My startups have raised more than $36 million from some top VC firms and a few hundred angels. I was a 10-year-CEO of eBags.com which grew at a 34% CAGR, profitably, over the last 8 years I was CEO. I am now the 5 years into being CEO and co-founder of Iterate.ai, an innovation workflow platform (plus services). Iterate is chalk-full of accomplished and incredibly bright technologists who help large organizations innovate with precision and speed. We specialize in areas like Blockchain, VR, and Deep Learning. This is me -->