The conventional wisdom among tech industry types is that Silicon Valley is a meritocracy where product, staff, and business plans count for just as much as who you know or what you look like. But as in so many other things, a new report indicates that an Ivy League education and a certain background go a long way when obtaining Series A funding. According to Reuters’ Sarah McBride, 70 of 88 Silicon Valley startups that received funding in the first half of 2013 had what she defined as a “traditional background”.
A traditional background? McBride uses that term to describe a company where “the founders had held a senior position at a big technology firm, worked at a well-connected smaller one, started a successful company already, or attended one of just three universities–Stanford, Harvard and Massachusetts Institute of Technology.” She examined only companies who received funding from the Valley’s best-known VC firms–Accel Partners, Andreessen Horowitz, Benchmark Capital, Greylock Partners, and Sequoia Capital, which may account for some of the results. But, by and large, Silicon Valley is a place where success is defined by who you know.
It’s certainly no secret that startup culture lacks diversity. At many companies, the biggest diversity in race, gender, class, national origin, and age comes on development teams, where raw talent and a willingness to work extremely long hours trump all other factors. But funding is absolutely a game of social networks and hustling; those who come to Silicon Valley with a phone full of email addresses and mobile numbers for the right contacts are absolutely a few steps ahead of the competition. It may be unfair and it may not be meritocratic at all, but it’s the way the Valley does business.