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What is the right age to found a company? February 29, 2012

Posted by jeremyliew in founders, startups.
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I read a story in this weeks economist that surprised me. It claimed that founding new businesses is not just a young persons game, but rather that the average age of a founder of a tech startup was 39.

Research suggests that age may in fact be an advantage for entrepreneurs. Vivek Wadhwa of Singularity University in California studied more than 500 American high-tech and engineering companies with more than $1m in sales. He discovered that the average age of the founders of successful American technology businesses (ie, ones with real revenues) is 39. There were twice as many successful founders over 50 as under 25, and twice as many over 60 as under 20. Dane Stangler of the Kauffman Foundation studied American firms founded in 1996-2007. He found the highest rate of entrepreneurial activity among people aged between 55 and 64—and the lowest rate among the Google generation of 20- to 34-year-olds. The Kauffman Foundation’s most recent study of start-ups discovered that people aged 55 to 64 accounted for nearly 23% of new entrepreneurs in 2010, compared with under 15% in 1996.

There is definitely an availability bias (dominated by people like Mark Zuckerberg and Bill Gates) that leads us to think that tech startup founders drop out of college to start their companies. But I did a quick and informal poll with my partners and found results consistent with Wadhwa’s findings. Roughly 50% of the founders of our current portfolio were in their 30s when they founded their companies, with roughly equal numbers in their 20s to their 40s:

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I went one level deeper, and compared the ages of the founders of internet companies to those of infrastructure companies:

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Here we start to see a difference – although half of founders in both categories are in their 30s, the remainder tend to skew to their 20s for internet companies and to their 40s for infrastructure companies.

This squares with my intuition more- what do you think?

Comments»

1. Tony Yi - February 29, 2012

great article since the media seems to focus on the fantastic stories of younger entrepreneurs and the underpinning companies that define the american dream – apple, msft, dell etc. they’re considerably outnumbered by these stats. it’s also very encouraging to experienced startup executives honing their skills in growth series companies with an eye on starting their own companies. building teams, meeting goals, getting funding – practice makes perfect.

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3. Perry States - March 2, 2012

I am now 48 and looking at my second tech start up. I started my first at age 34 and it was successful. I know that a very small percentage of startups make it past 5 years. I wonder what the percentages of successful startups are when broken out by the age of the founders? I bet the older founders have a significantly higher success rate due to their experience.

4. Varun Bansal - March 8, 2012

I think , I would agree with Mr Perry ‘s comment that the older founders have a significant higher success rate due to their exp and knowledge ,which cannot be compared with novice chap .

Secondly at age 30 you have some contacts,education (Post Grads),money and quality exp from industry . So to handle new venture and teams it becomes very handy .

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منتديات - May 7, 2012

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