Perhaps the most pervasive myth in startup culture is the myth of the college dropout, the young, twenty-something kid who dropped out of college (usually ivy league) to pursue their dream of a successful startup company and then go on to be an ultra-successful billionaire.
With some of the most famous names in tech (Mark Zuckerberg of Facebook, Steve Jobs of Apple and Bill Gates of Microsoft, respectively) all dropping out of college and founding their companies before the age of twenty-two, it’s easy to think these famous outliers are a part of the ‘norm’.
But according to a study from the Harvard Business Review, only 4% of college dropouts become successful startup founders. Furthermore, the research found that 62% of Unicorn founders held post-graduate degrees. (Unicorn founders own companies valued at a billionaire dollars or more.)
The research also found time being on your side. Finding that the probability of extreme startup success only increases with age, until your late fifties. The average age of the founders behind America’s largest growth startups is forty-five. Even Unicorn founders are most likely to be well over thirty before they start. (So don’t worry if you’re not primed to make Forbes Thirty under thirty.)
The higher the age of a founder the more experience they have and the more likely they are to make mistakes and learn from those mistakes. The average ages for different industries vary widely, as well. The average age across all startups hovers somewhere between twenty-nine and thirty-one with the average age steadily increasing year after year.
The average age for tech startups is somewhere in the early forties, despite the image that the famous aforementioned wunderkinder of tech put out. The oil, gas, and biotechnical industries see an even higher average age of forty-seven.
What about the most successful startups? Research discovered that the top 0.1% of startups based on growth in their first five years, we find that the founders started their companies, on average, when they were 45 years old. These highest-performing firms were identified based on employment growth. The age finding is similar using firms with the fastest sales growth instead, and founder age is similarly high for those startups that successfully exit through an IPO or acquisition. In other words, when you look at most successful firms, the average founder age goes up, not down.
However, when you look at success rates conditional on actually starting a company, the evidence against youthful entrepreneurial success becomes even sharper. Among those who have started a firm, older entrepreneurs have a substantially higher success rate. Older entrepreneurs were found to take more risks than their younger counterparts, and in business, many times those risks pay off. Our evidence points to entrepreneurial performance rising sharply with age before cresting in the late fifties.
Relative to founders with no relevant experience, those with at least three years of prior work experience in the same narrow industry as their startup were 85% more likely to launch a highly successful startup. And it makes sense, right? Just as you wouldn’t hire a freshly-minted college graduate with little on the resume as a senior vice president and expect them to be successful, it is unlikely that a young person with very little experience would be highly successful with a startup.
However, venture capitalists still tend to favor the young and inexperienced in Silicon Valley. Age bias, though unfair and unfounded, is still very much alive in Silicon Valley. VCs are not simply looking to identify the firms with the highest growth potential.
The bottom line? Don’t let the media warp your perception of what a successful entrepreneur looks like, it’s never too late to pursue your dreams.