The research is in: Entrepreneurs get better with age

Written by Technically Media CEO Chris Wink, Technical.ly’s Culture Builder newsletter features tips on growing powerful teams and dynamic workplaces. Below is the latest edition we published. Sign up to get the next one.

I followed that tradition in Technical.ly’s first days, during the early 2010s, and noticed an interesting divide. Young entrepreneurs answered confidently with a kind of unearned pride. Founders over 40 were more likely to question why I was even asking.

After one too many challenging exchanges, I mostly dropped the detail unless age seemed to be especially relevant to the story. It felt like too minor a point to sour an interview, and the more I thought about it, the less I could defend why it was important.

It was also increasingly clear that outing someone for their age could have very real consequences for entrepreneurs.

“The cutoff in investors’ heads is 32,” influential venture capitalist Paul Graham, who cofounded category-defining Y Combinator, said in 2013 about the age of entrepreneurs to back. “After 32 they tend to be a little skeptical.”

While criticized for its callousness, Graham’s remark became a defining one — and has been cited countless times in opinion columns and, even more interestingly, academic research. Callous or not, Silicon Valley disruptor-investor icon Graham was letting the rest of us know how age-biased business investors have been. He was far from alone.

“People under 35 are the people who make change happen,” VC Vinod Khosla said in 2011. “People over 45 basically die in terms of new ideas.”

This all would be one thing if betting on young founders proved successful. VCs are, after all, explicitly charged with seeking alpha, or above-market, returns by finding private-market businesses that will grow faster than public-market ones. They should trust the financial data, and many define themselves by their pattern recognition — the ability to spot what early indicators suggest will lead to big gains.

The trouble is that research keeps pointing to how flawed it is to prefer young founders.

The average exit age of successful startup founders between 2007 and 2014 was actually 47, according to research first presented in 2017. The average was actually slightly older in Silicon Valley than in other entrepreneurship hubs. In a 2020 follow-up paper, researchers showed that the likelihood of an entrepreneur having a financially successful acquisition or IPO increased all the way until the age of 60.

An investor like Graham would point out that they make their bets at the company’s earliest days, not at the time of its successful exit. Even then, the average age of a startup founder on day one is 45, according to the same working group. Even if you look only at the highest-growth software startups, that average age is 40.

In short: Graham’s class of investors may have been biased against older entrepreneurs at their own peril.

This is just the sort of thing that can result in an overcorrection. It’s easy to criticize now the cliche of the young startup disruptor, but that persona was itself a response to the frustration with the Wall Street banker persona blamed for the Great Recession.

The point of this new research is that entrepreneurship shouldn’t have an age maximum — just like it shouldn’t have an age minimum. Patterns and stories are helpful simplifications when they correct our assumptions, but they’re dangerous when they reinforce prejudgements.

In my experience, young people offer great insight into where the world is going, but they’re not especially good at how to get there. I say that as someone who has been both a startup founder at 22 and a CEO at 35. That makes intuitive sense: the future is theirs, but the road to get there is not yet.

This research isn’t just for founders and investors. It also shows why companies are better served with a multigenerational workforce. Ignoring the young upstart is as foolish as dismissing the seasoned veteran.

That makes me think I ought to return to listing the ages of my sources, just to demonstrate the success of experience.