Older Entrepreneurs Get a Bum Rap
Young entrepreneurs may fret that their barely-out-of-high-school looks could work against them when starting up. But here at Inc. we've already assured them that you can be taken seriously as a bright young thing as an entrepreneur--in fact, research and anecdotal evidence suggests youth can actually work to your advantage.
But can we offer the same reassurances to the older entrepreneur?
If you look more like the parent of someone about to go to the prom rather than the kid in the rented tux, are your chances of finding support for your entrepreneurial ambitions lessened?
Sadly, there's more evidence that being middle-aged correlates to disadvantages in entrepreneurship than there is that youth will hamper your ambitions, as the AARP blog recently pointed out.
Vinod Khosla, a co-founder of Sun Microsystems who is today a prominent venture capitalist, has publically spoken about his preference for funding young entrepreneurs on multiple occasions, the post points out. For instance, he said, "people under 35 are the people who make change happen. People over 45 basically die in terms of new ideas," at one conference last year.
Looking at the most prominent founders in the start-up world, one could get the impression that Khosla's bias against older entrepreneurs may be representative of broader currents among the start-up community. But according the AARP (which obviously has a horse in this race), the numbers simply don't justify this preference, which may be more a product of what kind of businesses older entrepreneurs tend to start:
As it turns out, the highest rate of successful entrepreneurship, according to the Kaufmann Foundation, is among those 55-64--twice the success rate of those age 20-34. According to a Newsweek article, their "start-ups get less recognition in the press, but they tend to involve more complex technologies like biotech, energy, or IT hardware. They also tend to sell products and services to other businesses, which consumers rarely see but which do most of the heavy lifting in powering innovation and economic growth." That means that they understand channel strategy, something that may elude the 20-somethings who are coding away in their garages. And more to the point, they simply do not have the business relationships established that are the foundation for cultivating channel/distribution partnerships.
"The venture community's investments should transcend age," urges the post, which concludes that VCs, "need to understand that 50+ entrepreneurs may have the most discretionary money to invest, the connections and work experience to execute, plus the motivation and drive required to start a business that works."
Do you agree that VCs need to take a closer look at middle-aged entrepreneurs? Or is Khosla's opinion simply harsh...but realistic?