45 years old.
If that surprised you, there’s more in a National Bureau of Economic Research working paper (paywall) by researchers at the US Government, MIT Sloan and the Kellogg School of management.
A few other notes from the Techcrunch article on the paper –
- The source: A variety of administrative data sets to investigate the age of founders of new businesses, and particularly the age of founders of high-performance startups. Administrative data sets are the “gold standard” of data, because unlike surveys or other statistical sampling methods, they represent the entire population under consideration.
- Findings point to 40+ founders: The average age of a startup founder is about 41.9 years of age among all startups that hire at least one employee, and among the top 0.1 percent of highest-growth startups, that average age moves up to 45 years old. Those ages are taken from the time of the founding of the company.
- Findings don’t vary much by geography and industry: Some sub categories like like oil and gas can have average founder ages as high as 51.4 years old. The researchers wrote that “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.”
- Older correlated to better: One interesting dynamic in the data is that older entrepreneurs appear correlated with better startup performance. “For example, the 1,700 founders of the fastest growing new ventures (1 in 1,000) in our universe of U.S. firms had an average age of 45.0 (compared to 43.7 for the top 1% and 42.1 for the top 5%),” the researchers wrote. “Overall, we see that younger founders appear strongly disadvantaged in their tendency to produce the highest-growth companies,” the researchers wrote. One reason, they argue, is that older founders tend to have more years of experience in their industries.
- Why is the stereotype different from reality?: The authors speculate that the reason could be that younger founders are “more in need of early-stage external finance” because older founders have the connections, networks and personal wealth to fund their ventures. VCs don’t have access to those deals, so they gravitate to the kinds of deals they can potentially fund.
There are a couple of aspects of this study that are fascinating. First, it speaks to the power of narratives over data. Narratives are often shaped by outliers and most of us think of a few outliers when we think of successful start-up founders. Second, availability bias is hard to overcome when you don’t have other data. Venture capitalists write about young founders they back all the time. It is easy to forget that there are other sources of data on the subject too.
And, finally, conventional wisdom around experience is wisdom for a reason.