When I look at what the EY Entrepreneur Of The Year® 2014 U.S. finalists have accomplished, I have renewed hope about sustained innovation and economic growth.
The program, the first and only truly global awards program of its kind, honors entrepreneurs whose spirit of innovation and disciplined execution are building some of the best companies in the country.
There is so much we can glean from these exceptional entrepreneurs. While many companies hesitated on strategic decisions because of economic hardship or doubt, these 663 finalists didn’t let the noise in the current landscape keep them from executing on their vision.
This year, several interesting trends emerged across the vast finalist pool.
Technology
Entrepreneurs in the tech sector can relax a little when contemplating their futures because this sector has historically attracted more investors than others. It also doesn’t hurt that nearly every company today, regardless of industry sector, depends heavily on technology to improve the customer experience and drive results.
Consider this: Among these 2014 finalist companies, technology is the top sector to attract private equity and venture capital investments. More than half (56 percent) of the finalist companies in the tech sector have received VC funding, compared with just 27 percent in other sectors. Similarly, finalist companies in the technology sector were the highest target for merger and acquisition activities, with 26 percent undertaking a merger or acquisition in the past three years.
Technology can dramatically reduce the length of time required to go from idea to execution. For these companies, technology isn’t an obstacle, but rather an enabler for growth.
Youth
Nearly half (46 percent) of the 2014 finalist companies are less than 10 years old. Interestingly, 55 percent of the private equity-backed companies are less than 10 years old, with a median age of 9 years. Among VC-backed companies, those numbers are 71 percent and 7 years, respectively.
Young companies have been the leaders in net job creation over the past 30 years, so it’s not surprising that investment funds flow in their direction. This should also provide inspiration to those who are just getting started. The cycle time from startup to significant impact isn’t as long as it once was.
Funding
The good news is that investments from financial sponsors are at record levels, giving high-growth companies a wide array of options when seeking financing. Half of these finalist companies have received private equity and/or VC funding, which is up 17 percent from last year’s finalist class.
Whether through the realization of portfolio investments that had been postponed through the recession or the availability of additional funds as economic trends and valuations have improved, it appears there are plenty of investors eager to participate in the next innovative product, market or idea.
Our 2014 U.S. finalist companies are on an impressive trajectory, with combined revenues of $197 billion and a 34 percent revenue growth in each of the last two years. As job creators employing more than 529,000 people — a 32 percent increase over the past two years — these companies provide inspiration that has a significant impact across our economy. ●
