The Dynamics of Team Entrepreneurship: Solo Founders vs. Founding Teams

The role of team entrepreneurship in start-ups has gained increasing attention due to the perceived benefits of having multiple founders, such as a diversity of skills, expertise, and emotional support.

Team-based ventures allow responsibilities to be divided, helping founders address different business needs more effectively. Investors, particularly venture capital firms, often favour teams, viewing them as more stable and capable of scaling. Despite these advantages, recent research has challenged the notion that teams are always beneficial, showing that businesses started by solo founders tend to survive longer and generate more revenue. This may be due to the ability of solo entrepreneurs to maintain control, execute their vision without compromise, and make quicker decisions without managing co-founders.

An analysis of over 1200 applicants to the 2024 Startup Awards finalists showed that 64% of businesses are started by solo founders, while 36% involve founding teams of two or more individuals. Gender differences are striking with 88% of female-founded start-ups being solo ventures, compared to 65% of male-founded businesses. As the number of founders increases, female-only representation declines with all-female teams disappearing entirely in businesses with three or more founders. Mixed-gender teams become the majority in these larger ventures. This pattern may reflect the barriers women face as businesses grow, such as limited access to networks, funding, and opportunities, making it more challenging for all-female teams to scale.

Tech ventures are more likely to have multiple founders compared to non-tech businesses. Non-tech start-ups tend to require simpler skill sets, enabling individuals to launch them independently. In contrast, tech ventures often demand specialized knowledge in areas such as software development, artificial intelligence, and product engineering, making team-based founding more common. Larger founding teams are particularly prevalent in tech businesses, suggesting that the complexity of these ventures necessitates diverse expertise that a single founder may struggle to provide. Age also plays a role in team entrepreneurship.

Older entrepreneurs are more likely to form larger founding teams, possibly due to broader networks, greater experience, or more resources to involve additional co-founders. Interestingly, regional analysis shows no significant difference between prosperous areas and other parts of the UK in terms of team entrepreneurship, suggesting that regional factors may not strongly influence the choice between solo or team-based founding.

This analysis highlights the nuanced dynamics of team entrepreneurship, showing that while teams can provide distinct advantages, solo ventures remain highly effective in certain contexts. It also shows that both team-based and solo entrepreneurship have unique strengths, with their success often depending on the industry, founder demographics, and the specific demands of the business.