Our society places a very high value on youth. In the entrepreneurial landscape that value is evident by the number and diversity of entrepreneurial programs and services targeted at “young people.” Some examples are:
- Most colleges and universities now have degree programs, certificates, or areas of emphasis in entrepreneurship.
- The many business plan competitions hosted or sponsored by colleges and universities.
- Many high schools are sponsoring competitions or other programs to interest students in entrepreneurship.
- Many business incubators and accelerators focus on young entrepreneurs. Some of these are affiliated with colleges and universities, others are not.
- And then there is Peter Thiel of PayPal fame, who pays young people to drop out of college to start businesses.
It’s all good.
I did a focus group recently in a rural community with group of business people. The objective of the focus group was to identify how to attract entrepreneurs to the community. There was much discussion about attracting college kids until one of the participants (a successful entrepreneur) said: “I didn’t even think about starting a business until I was in my 30’s.”
That got me thinking. Right out of college I tried to start a business that failed within a year. I didn’t have the capital and I didn’t have enough experience. And, I didn’t have the experience to raise the capital. I started my first successful business at age 32. I was 46 when I started the second one and I was 52 when I started the third.
When I consider the five dozen startup entrepreneurs I have worked with over the past few years, only a couple were twentysomethings. And those entrepreneurs had very steep experiential learning curves to get over.
Even in the tech arena, the few successful tech startups I have been exposed to in St. Louis were founded by entrepreneurs who were already past 30 (or maybe they just looked older).
I did, however, have the opportunity to work with a couple of college seniors who started a business (magazine publishing, if you can believe it) and upon graduation continued to grow the business. Fifteen months later they had to sell the company since both had been accepted to grad school and they couldn’t put it off any longer (I am sure their parents had something to say about it). One went to Harvard and the other went to Stamford. Significantly, they sold the business for 17 times earnings!
I suspect that they were both probably bored with their MBA coursework. They learned more starting a business than they ever would in a classroom. Would they have stayed in St. Louis? I don’t think so. One is headed to Wall Street and the other to Google.
The point here is that most of the successful entrepreneurs I have been exposed to were not college students or recent graduates; they are in their thirties, forties, and fifties. Maybe that is why it is so difficult for “young” startups to raise capital. The angel investors and VC’s realize that these kids, regardless of how great their idea is, need to get over the learning curve and that needs to be done on someone else’s nickel.