Disclosure: I’m a co-founding partner at Ada Ventures, which commissioned the research referenced in this article.
Unicorn startup company, venture capital to fund small company to success in world business competition, begin or start new company concept, precious unicorn with rainbow just hatch from golden egg.
getty
Any investor worth their salt wants alpha returns. Backing a startup that hits stratospheric heights is the pinnacle. But somewhere along the line, venture capitalists got stuck thinking alpha founders had a certain look, voice, or background. ‘Pattern matching’ was born – the practice of identifying and backing founders who resemble previous success stories.
So ingrained, so automatic, it’s easily mistaken for a gut instinct. This person just feels right. I believe in them. And so investors double down. And funding gaps widen.
As Suranga Chandratillake, General Partner at Balderton Capital, puts it: “For an industry that likes to say over and over that it’s all about the founders, it’s amazing how many people in venture will resort to lazy signal spotting like what school someone went to or where they worked last.”
Diversity becomes a nice-to-have. Socially-conscious, not commercially-credible. But a new report released this month and commissioned by Ada Ventures (where I’m a co-founding partner) offers something rare: empirical evidence that challenges the alpha archetype. In partnership with behavioural scientists at Synaptiq, we analysed the psychological traits of 171 unicorn founders across the UK, Europe, and North America.
The findings offer concrete insights into what really drives extraordinary success, and a new lens for assessing potential objectively. From it, I’ve drawn 4 steps VCs can take to back the kind of founders who build billion-dollar companies:
Step 1: Don’t mistake familiarity for potential
We’re not always conscious of it. There’s a very human impulse to relate to others; to spot something to connect over in a founder’s school, accent, or network. But given VC as an industry is still mostly white, male, and privately educated, those instincts can skew everything.
They shape who feels ‘backable’ in the moment. And they also shape how we interpret past success stories. What looks like evidence-based judgement is often just familiarity bias; a tendency to favour what feels familiar, what’s worked before, or who reminds us of someone who did. The fundamentals of what makes a person successful are replaced with heuristics.
Money management, financial planning or wealth management or investment portfolio, paying for tax, loan or debt, inflation concept, businessman using pizza cutter to split golden dollar money coin.
getty
Adam Shuaib, General Partner at Episode 1 Ventures, also points to another recent development that’s further entrenching pattern matching: the “huge explosion” in the number of startups. For seed funds receiving 500 pitch decks a week and only able to meet with 5% of those, the question quickly becomes, as he puts it, “how do we filter out the other 95%?” That’s where rules of thumb and assumptions double as easy filtration systems.
But in Episode 1’s conversations with unicorn founders and the GPs who backed them, it became clear that the signal that led to the deal wasn’t any of these heuristics. It was “niche behavioural traits,” Shuaib says. Their quirks and personality traits – not their template-fitting backgrounds – were what caught the interest of some of the biggest funds in Silicon Valley.
Our new research can help more investors to see things through that lens. Of the 159 traits identified, 141 were shared by all unicorns, regardless of gender, ethnicity or socio-economic background. These extraordinary founders have a clear psychological profile. And these are the kinds of things VCs should be looking for. As Shuaib says, “very very few in practice do this, and the ones that do choose to use this approach can be the next generation of world-leading funds.”
Step 2: Understand the traits driving success
As Yvonne Bajela, Venture Partner at LocalGlobe (and investor in multiple unicorns), notes, “while no two founders are the same, there are some common characteristics that set exceptional entrepreneurs apart.” Crucially, she adds that VCs are “in the business of backing outliers, and those defining traits often aren’t the traditional markers investors tend to look for.”
Now we now have an objective sense of what those markers actually are. We found that unicorn founders share an overwhelming number of traits. But four stood out most strongly. The first of these was low neuroticism. Often associated with resilience and composure under pressure, consistently low scores suggest high-performing founders are less prone to anxiety or guilt than the average person.
The second was high analytical thinking – a strong ability to break down complex problems and think through challenges logically. Unicorn founders scored consistently above average here.
The third was positive emotion word usage, which reflects internal satisfaction; how a person feels about their life and how warmly they come across. Unicorn founders showed similar levels across the group.
And finally, the use of “we” language. This is linked to how inspiring a person seems, and how much they care about creating bonds and social connections. Unicorn founders scored higher than the average person, suggesting they are more likely to be inclusive leaders.
For VCs, these traits provide a consistent, measurable profile of billion-dollar potential that transcends background. They build a picture of a unicorn’s foundational nature. Inspiring, analytical, composed. Nothing exclusive to any one group, but a rare combination of ingredients that could lie in wait in any corner of the ecosystem. For Bajela, insights like these “reinforce what experience has long shown: extraordinary founders can emerge from anywhere.” And traditional pattern matching won’t uncover them.
Step 3: Recalibrate for subtle differences
Beyond the key traits shared across the unicorn cohort, we found 18 that varied slightly depending on whether they came from a diverse or non-diverse background. They weren’t statistically significant, but they hint at their own story.
Diverse founders were more likely to use language that signalled empathy and cooperation. These are traits linked to relationship-building and, in some cases, better exits. They showed signs of being less tentative, suggesting greater self-assurance. They demonstrated a stronger present-focus, a trait often linked to charisma and audience engagement. They also leaned towards pragmatic framing, while non-diverse founders scored slightly higher on imagination.
Meghan Stevenson-Krausz, Co-CEO at Diversity VC, points out that these differences “show that what we’ve sometimes seen as deviations from the ‘norm’ – the adaptations diverse founders build to navigate bias – can actually fuel performance.” They’re likely to be adaptive strengths, shaped by environment and rooted in the same potential, but it’s important to be aware of how they might show up in everyday settings. A stronger present-focus might help with charisma, but it could also shape how long-term vision is framed in a pitch deck.
“The different languages of ambition is something I think a lot about,” says Carmen Alfonso Rico, Founder of Cocoa. “Unicorn founders share many of the same underlying traits, though they’re sometimes expressed differently. It’s a powerful reminder that the alpha lies in hearing the signal beneath the background.”
Understanding these subtleties and recalibrating for where certain traits can signal strength in some founders can sharpen your eye for potential others might miss.
Step 4: Tailor post-investment support
Any good VC knows that spotting potential is only half the job. The other half is helping it thrive. Coaching, introductions, and day-to-day support can be make or break. And understanding what makes a unicorn doesn’t just help us find them, it helps us back them better.
While high-potential founders tend to share a core set of traits, the subtler differences we uncovered offer valuable insights about how to support them once the deal is done. For founders with stronger present-focus, that might mean offering storytelling training. For those who lean toward pragmatic framing, it might mean working together on more abstract ideas when the moment calls for it.
Breaking out of pattern-matching helps VCs show up in far more meaningful ways. From lighting on talent you might never have spotted, to drilling into what kind of support will actually make a difference. This is a genuinely exciting time to invest differently. Innovation is exploding. Billion-dollar opportunities are waiting to be backed. And the tools to find them are finally catching up.
