Bloggers have gone off on a tangent this week over several posts concerning the age of VC backed entrepreneurs. Valleywag put out the following graphic suggesting the optimal age for a ‘homerun-level’ idea to be 26.
I think it is important to note several points. These points should help to reassure any readers over 30 whose hopes for acquiring venture financing were discouraged.
-Type of business. The Valleywag list primarily features disruptive technology companies. Of course youth will have an edge here since they are the ‘early adopters’ and tend to have more time’
-Time. How many 40 year olds with a family have the time, resources or the understanding spouse allowing pursuit of the startup dream?
-Evolution. Yahoo was not a huge media company when it started; nor was eBay. These companies were ultimately ‘homeruns,’ but I guarantee it only happened with the help of seasoned veterans, advisors and executives over 30.
-Social Capital. What else does the list have in common? They may be young — but all these people also have lots of social capital; deep networks and connections.
I was not surprised by the Valleywag list, or by the slight bias of VC’s to look to youth for their killer investments. As an aside, I am a member of Entrepreneur27 an organization devoted to raising awareness of entrepreneurial activity’ and 27 is not a random part of the name.
From a VC’s point of view, investing in 20-somethings makes sense. Older folks are just as likely to be entrepreneurial, but because their businesses tend not to be ‘disruptive or cutting edge’ (web, AI, etc) we just don’t read about them as often and the potential returns are not as great ‘“ even if they are in fact less risky bets.
For example, if I was a VC looking at a potential investment with a founder who has three kids, I would definitely think twice no matter what his or her level of expertise. The older you are the more the unknowns are amplified. Age usually correlates with commitment and responsibility. Again, from the perspective of a VC, someone with a law degree is more likely to be a royal pain over details like term sheets, founder salaries, etc. Young persons are more likely to act like the puppets VC’s really want.
To summarize, this list should not be surprising for the reasons suggested above. First realize that the really important thing about all those listed is their access to connections. Next, remember that the types of companies listed by Valleywag only represent about 2% of the entire genre of fundable businesses. Third, who the hell wants VC money anyway? In my opinion it’s better to start a company later anyway when you have the resources to self-fund or the connections to get angel money.
But hey, 50 is the new 40, right? So by the same vein, 36 is the new 26!
