The myth of young startup founders

Instead of succumbing to the emotionally appealing but highly misleading mythology about the characteristics of young entrepreneurs know that the most successful ones often start much later than you have been led to believe.

In February 2004, Mark Zuckerberg launched Facebook from his Harvard dormitory at the age of 19. By that summer, Zuckerberg moved himself and the company to Silicon Valley and never looked back.

Over the next eight years, Facebook attracted half a billion users and nearly $7 billion in venture capital investment, en route to a May 2012 IPO that valued the company at more than $81 billion. Today, Meta (Facebook) has more than one billion users. Zuckerberg remains CEO and, at 38, has an estimated net worth of $57.4 billion, in the top 15 of the world's richest people.

It's a fascinating story. So fascinating, in fact, that Hollywood made a movie about it. And while the story of Mark Zuckerberg and Facebook undoubtedly inspired an entire generation of young entrepreneurs and reframed their imaginations about what's possible, people easily forget that a big part of what makes the story compelling is that it's so unusual. Mark Zuckerberg is not only an outlier, he is also an outlier among outliers.

Researchers have known for a while that the peak age for general entrepreneurship occurs around mid-career (mid-30s to mid-40s), but an influential academic study published in 2019 shows just how wrong the popular narrative is. that twenty-something tech billionaires are the norm even for high-growth, high-tech startups.

Economists Pierre Azoulay, Benjamin Jones, Daniel Kim, and Javier Miranda analyzed government data on the founders of all US companies that were started during a recent eight-year period (2007-2014). This data set, restricted for use by the US Census Bureau, allowed researchers to obtain an accurate and complete view of all business startup activities in the United States.

The authors calculated the average founder age (at founding) from key startup characteristics (industry, financing, patents, location) and outcomes (hypergrowth, acquisition, or IPO). Below is the average age of the founder along these dimensions:

All companies (with at least one employee): 42 years.

0.1% fastest growing companies: 45 years

High-tech industry: 43 years

Risk-backed: 42 years

Patents filed: 45 years.

Successful exit (acquisition or IPO): 47 years

Located in Silicon Valley: 42 years

Located in a business center: 41 years.

The data show that the age at founding of the company follows more or less a normal statistical distribution (“Bell Curve”), with a maximum founding age in all US companies (blue line) between late 30s and early 40s. But for the fastest growing one percent of companies (red line), the founder age curve is pushed further to the right (older founders), with a Peak age clustered in the mid-40s.

Average age of founders of fast-growing startups

Young founders in their 20s and 30s are less likely to start high-growth companies compared to their share of total companies founded (red line below the blue line on the left side of the graph). In contrast, founders aged 40 and older are more likely to start high-growth businesses relative to their contribution to total companies founded (red line above the blue line on the right side of the graph).

Below we see two tables showing the average founder age by key geographies (top panel) or success outcome (bottom panel).

Each table has four columns, first for all companies and then for three types of technology definitions: the first by industry, the second by venture capital backing, and the third by patenting.

As the data shows, the average company age is quite similar across these dimensions, with all definitions of high-tech, high-growth startups having a higher average founder age than for the all-company benchmark. .

One exception is that the founders of high-tech and venture-backed companies in Silicon Valley and other key business centers tend to be slightly younger than the founders of all companies in those regions, but the differences are small. Still, the average age of these founders is roughly around 40, much older than the popular college dropout narrative of the mid-20s.

Finally, the study shows that, conditional on the start of a company, the probability of achieving “high success” (the fastest growing 0.1% of companies or the successful exit) is lower for founders in their early stages. 20 years and increases linearly along with the founder's age until the end of the 50s.

Although the likelihood of starting a business declines among these older workers, those who do are more likely to be successful.

And yes, it's true that there are more outliers (i.e. younger founders of very successful startups) in sectors like software and in leading regions like Silicon Valley, which helps explain some of these small differences. But overall, this work demonstrates that many of the most impactful companies in the United States are founded by founders who are much older than the popular narrative suggests.

Instead of succumbing to the emotionally appealing but highly misleading mythology about the characteristics of high-growth, high-tech, high-impact entrepreneurs, know that the most successful are not the young but those who often start much later than they are expected to. has made believe.