Mbandaka—For those steering early-stage startups toward the coveted unicorn status—a valuation of $1 billion or more—the factors influencing successful scaling have often seemed elusive.

According to a new release by World Economic Forum, their Scaleup Report outlines critical elements that can guide founders, investors, and policymakers.

Built on 11 years of primary research, the report encompasses data from nearly 100,000 startup founders. Between 2015 and 2019, 30,000 founders responded to surveys, 20,000 provided confidential financial data, and 7,000 startups shared their domain names. The report successfully identified hundreds of startups with valuations exceeding $50 million, and 18 unicorns, within four to eight years of their inception.

Startup Genome pinpointed several controllable factors by founders that are crucial for scaling. These include 'global connectedness,' offering stock options to all employees, and providing equity to at least three senior advisers.

Global connectedness emerged as a defining factor for startups' success in the report. Startup Genome had first introduced this concept in 2017, emphasizing the importance of international connections among ecosystem stakeholders. Higher global connectedness multiplies a startup's chances of successful scaling by 3.25 times compared to those with low levels of global connectedness. Additionally, startups that 'go global' grow their revenues at a rate 2.1 times faster than those that do not.

Employee stock options (ESOPs) also play a pivotal role. By offering ESOPs to all employees, founders can dramatically improve their chances of scaling. Stock options serve as motivational tools, facilitating employee retention and team commitment. The report found that unfavorable tax policies on stock options in certain countries could severely limit startups' ability to issue ESOPs, thus impacting their scaling prospects.

Securing qualified advisers for a startup can significantly affect its scaling potential. By offering stock options to successful founders and senior executives as advisers, startups double their chances of successful scaling when going from zero advisers to one or two. Adding three or four advisers can increase the likelihood by more than 50%.

The report concluded that startups can significantly enhance their chances of scaling to valuations of $50 million and beyond by embracing these strategic actions.