There is an image of Silicon Valley founders who changed the world with their startups. As these firms became the giants by gaining a worldwide presence, a stereotype has formed in the minds of people: a founder is a computer nerd, teenager, and ambitious with a vision to bring disruption in the world. This image is formed with founders including Steve Jobs, Bill Gates, and Mark Zuckerberg. Although these founders have brought disruption and changed the world, it is not necessary that successful startups need leaders fitting to this image to blaze a trail. Jeff Bezos was 31 years old when he founded Amazon in 1994, while, Marc Benioff was 34 when he co-founded Salesforce in 1999. There are more examples in which successful startup founders are much older than Zuckerberg, Jobs, Gates, Bezos, and Benioff at the time they founded their companies.
A group of researchers has conducted an extensive investigation on the age of founders of high-growth startups. Their study has found that the stereotypes do not align with inferences of the research. The researchers, Pierre Azoulay, J. Daniel Kim, Benjamin Jones, and Javier Miranda, presented their study at National Bureau of Economic Research. They gathered various datasets to explore the age of founders of successful startups. Other surveys and research studies use statistical sampling methods. But these datasets represent “gold standard” of data because they have gathered by taking the whole population into consideration.
The research found that average age of startup founders in Silicon Valley is 41.9 years. The companies which hire at least one employee were taken into consideration to find out this age. On the other hand, the average age of founders of top 0.1 percent high-performance startups is 45 years. The age was considered according to the time when the company was founded. The population of founders was categorized based on various parameters including industry and geography. For instance, an average age of startup founders in the oil and gas industry is 51.4 years. The researchers wrote, “The only category where the mean ages appear (modestly) below age 40 is when the firm has VC-backing. The youngest category is VC-backed firms in New York, where the mean founder age was 38.7.”
The researchers found that the old age of entrepreneurs was related to the better performance of their companies. The founders who took time to launch startups performed better, as per the finding of the study. According to research statistics, 1,700 founders of new fastest-growing businesses in the Silicon Valley have an average age of 45 years in comparison to 43.7 years for top 1% firms and 42.1 years for top 5% firms.
The researchers wrote, “Overall, we see that younger founders appear strongly disadvantaged in their tendency to produce the highest-growth companies.” They also argued that older founders are more successful than younger founders as they have more experience in their respective industries.
These findings show that most of the successful startups are run by founders in their 40s. This raises an important question: Why do venture capitalists focus on backing younger entrepreneurs who are statistically unsuccessful? Researchers argue that younger founders need early-stage finance more than older entrepreneurs. On the other hand, older startup founders have networks, connections, and personal wealth to fund their startups. Whether venture capitalists back any startups or not, it is clear from the research that the stereotypical founders of startup do not guarantee success. However, the probability of investing in firms with older startups increases the chance of success due to their experience and acumen developed over the years.