Here Is The Ideal Age To Succeed As An Entrepreneur, Study Finds
It’s young and it doesn’t know. That’s kind of what one might think from reading this new study. However, most of the stars who are at the head (and at the origin) of Silicon Valley’s major successes started and succeeded before the age of thirty, be it Mark Zuckerberg, Evan Spiegel (Snap), Elon Musk, Larry Page, Sergey Brin, Steve Jobs or Bill Gates and certainly many others.
But if they made it through their genius, their work, their vision and a little help from fate for some, did their age at the time of their ascension play a crucial role? Personally, I think so. These people are rock stars, and rock stars become famous when they’re young because age is part of the legend. It’s a question of image.
That being the case, is it the case for all entrepreneurs? I’m not sure. New research to be published in the American Economic Review casts doubt on the idea that youth is an advantage when it comes to entrepreneurial success, especially in the case of high-growth entrepreneurship.
A team of researchers led by Pierre Azoulay of the Massachusetts Institute of Technology has studied the relationship between age and high-growth entrepreneurship.
“Our main finding is that successful entrepreneurs are middle-aged, not young,” the researchers say. “We find no evidence to suggest that founders in their 20s are particularly likely to be successful. On the contrary, there is evidence that founders are particularly successful when they start a business in middle age or beyond, while younger founders appear to be at a disadvantage. »
Older people do better than young people
To arrive at this conclusion, Pierre Azoulay and his team assembled data from a variety of sources, including the U.S. Census Bureau’s Longitudinal Business Database (LBD), tax forms (Form K-1 for S companies and Form W-2 for C companies), and data from the annual U.S. Census of Entrepreneurs (ASE) survey. The researchers were then able to compile the records of more than 2.5 million entrepreneurs who have started businesses in the United States (excluding sole proprietorships) since the 1970s. Interestingly, the average age of entrepreneurs in all firms was 42 years.
The researchers then looked at founders who were active in high-growth entrepreneurship, typically start-ups and digital. The researchers found that the average age of the founders of high-tech companies was 43 years old. The average age of founders of venture capital-backed start-ups and Silicon Valley-based companies was 42.
The researchers then examined whether the age of the entrepreneur was a predictor of success. To do so, they separated the founders of the most successful entrepreneurial firms and compared their age to that of the general population. Contrary to popular belief, they found that founders of more successful firms were slightly older. This was the case when the authors defined success in a variety of ways, including determining whether founders successfully “exited” (i.e., by acquisition or IPO) or by measuring employment growth.
The authors conclude: “The 1,700 founders of the fastest-growing new companies (the top 0.1%) in our universe of U.S. firms were on average 45 years old at the time of their creation (compared to 43.7 years for the top 1% and 42.1 years for the top 5%). Regardless of the measure of the size of the technology share chosen, we see that older founders are progressing towards higher returns, particularly for the top-performing companies (1 in 100 or 1 in 1,000), as well as for those founders who have successfully exited. This evidence is at odds with the widespread belief that successful entrepreneurs tip the balance in favor of younger ones. »
Researchers also report differences in the entrepreneurial sector. Not surprisingly, entrepreneurs in the oil, gas and manufacturing sectors tend to be among the oldest, while entrepreneurs in the telecommunications, data processing, and software publishing sectors are among the youngest.