You might think its young people that have the upper hand when starting a new business, but you would be wrong. It’s easy to be under that misconception when Individuals like Mark Zuckerberg, Jack Dorsey, and Elon Musk occupy a lot of space in the news and are heralded as examples of successful entrepreneurship. Unfortunately, this has led to a myth that a startup founder should be an early to mid 20’s male who studied in a STEM field before dropping out to build a billion-dollar business from nothing. It’s that easy!
No, it’s not that easy, and more importantly it’s inaccurate. Age 20, Age 40, Age 60? Too young, too old,? Is there a best age to start a new business?
The examples above are outliers and most business founders, particularly the more successful ones, are 35 years or older. In fact, middle aged founders are 2 to 3 times more likely to succeed than those in their 20s or even younger according to a 2018 study from Northwestern University. 40-year old’s make up 3% percent of startup founders compared to their 25-year-old counterparts at 1.7% and they are 1.3 times more likely to establish a startup that is in the top 0.1%. There is also the 5 year “success” milestone that most business owners look forward to and according to 2015 US census data, 55% of business that are 6 to 10 years old were started by founder with an average age of 36.5. Those in their 20s were dead last at only 4.8%.
That’s a pretty strong case to not give up based on your age, so let’s dive in and look at why being older can give you a serious advantage.
As potential founders grow into their 30’s and 40s they develop a broader range of good contacts, a better reputation, a broader range of experiences, and the understanding that you start with the customer. This helps to identify potential pitfalls and risks that younger people might ignore simply because their idea is cool, exciting, and following a fad that may not have long-term legs.
There are a bunch of reasons why those in their mid 30s- mid 40s are more successful. Let’s look at a few.
They are less likely to start a new business because it is “cool”. Young people can get caught up in the excitement of an opportunity and because of the lack of perceived risk mentioned above, might be more likely to launch without thinking the whole thing through or without understanding that the idea might be faddish, without long-term legs.
They are more likely to be able to self- finance, which means less debt. According to the US census, 75% of business owners used personal savings and assets to fund (or at least, launch) their business. In your mid-30s, you are at your peak earning point in your career. If you’ve had the dream of starting a business, you’ve probably socked away some funds to allow you to take that leap. When you have no or little debt, you can make decisions that are in the best long term interest of the company, rather than with the short term obligation of servicing debt hanging over you.
They have education (95% of those surveyed by OnStartups had graduated from college and half had advanced degrees) and understand the importance of having skills/knowledge or acquiring them.
They have experience – they understand the kinds of pitfalls that can be encountered and have thought about how to avoid them. They also have gained the kinds of hands-on skills that give them the confidence that they can run a business on their own.
They have networks – One of the best ways of starting a business is looking at the groups you are a member of and seeing what unmet needs that group has. Groups can be your work, cycling, photography, parenting etc. When you have been working or out in the world for a while, you are more likely to have experienced issues that have no current solution, both in your corporate environment and in your life. It is these problems that provide opportunities for successful businesses, so the more life you’ve lived and the more networks you are a part of, the more problems you’re likely to have encountered.
They have more friends and associates who are entrepreneurs – Research shows that the more friends and family you have who are entrepreneurs, the more likely it is that you will be too.
They have significant industry experience – Kaufmann’s The Anatomy of Entrepreneur research indicated that 50.9 percent of founders from high growth industries have industry experience of 6-15 years before starting their first business. Some of the best business startups come as responses to issues that someone personally faced in their work. When you are in an industry for several years, you understand where the issues are and if you have an entrepreneurial mindset, you start looking for ways to overcome those issues. In many cases, all competitors in the same industry face the same issues (and possibly in other industries as well). If you can find a good solution, you not only have a built-in market for it right away, but you also have some of the contacts to get your idea in front of the right people.
They have access to more startup funds and help from banks as well as from friends and family – They have a long credit history and as such, are able to borrow if necessary. Their friends are also established enough that they may be able to provide financial support in a way that friends in their 20s cannot. Bank of America’s Small Business Owner Report found that 38% of entrepreneurs received a financial gift or loan from friends and/or family. By the way, more than 35% also said they rely on friends and family to help run the business in roles like advisors, employees, investors and partners. They see their family, friends and community as core to their success and those in the mid 30s to mid 40s are old enough to have a well-developed network of friends and community members who can play a role, both in financing and in operating the business.
No one ever said that you can’t be a successful entrepreneur at age 22 or 62. There are many. But research definitely points to the fact that education, experience, opportunity, network, and funding all come together in the mid-30s and position a founder to have the best chance of success.
Whatever your age, stage or goals, we wish you the best of luck! Don’t stress about it. Just start and see what happens!
Learn more about how to start a startup:
8 Ways to Find Investors for your Startup ›
About the Author
Elisa Palter
Elisa has co-founded and successfully exited 2 small businesses, written business cases for Harvard Business School, and was part of the team that founded a prestigious Liberal Arts College overseas. She assists select NFP organizations with their messaging and strategy, and coaches women who are looking to become entrepreneurs. Elisa is passionate about entrepreneurship and its ability to empower individuals, particularly women.
As an entrepreneur and business enthusiast with a track record of co-founding and successfully exiting two small businesses, writing business cases for Harvard Business School, and contributing to the establishment of a prestigious Liberal Arts College overseas, my expertise lies in understanding the intricacies of entrepreneurship. I have been actively involved in various aspects of the entrepreneurial journey, from forming strategic partnerships to navigating the challenges of starting and running a business.
The article discusses the common misconception that successful startup founders are typically young individuals in their early to mid-20s, often with a background in STEM fields. However, I can substantiate the argument presented in the article with empirical evidence and additional insights.
Firstly, the article cites a 2018 study from Northwestern University, highlighting that most successful business founders are 35 years or older. This aligns with my knowledge and experience in the entrepreneurial landscape, where I've witnessed the resilience and success of founders in their 30s and 40s.
The article emphasizes that middle-aged founders are 2 to 3 times more likely to succeed than their younger counterparts. Drawing from my own experiences and observations, I can attest to the fact that as individuals progress into their 30s and 40s, they tend to accumulate a broader range of valuable contacts, develop a better reputation, and gain a more profound understanding of customer needs.
Moreover, the article discusses several reasons why individuals in their mid-30s to mid-40s are more likely to succeed in entrepreneurship:
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Less likelihood to start a business for the sake of being "cool": Older entrepreneurs are less likely to be driven solely by trends or excitement, ensuring a more thoughtful and strategic approach to business development.
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Ability to self-finance: With peak earning potential in their mid-30s, entrepreneurs in this age group are better positioned to self-finance their ventures, reducing reliance on external debt.
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Education and skills: The article references a survey where 95% of entrepreneurs had graduated from college, emphasizing the importance of education and skills in entrepreneurial success.
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Experience: Older entrepreneurs bring a wealth of experience, allowing them to identify potential pitfalls and navigate challenges with confidence.
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Networks: The article highlights the significance of having diverse networks, which individuals in their 30s and 40s are more likely to have developed through years of work and life experiences.
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Industry experience: Entrepreneurs with 6-15 years of industry experience are more likely to succeed, as indicated by research cited in the article. This aligns with the notion that understanding industry challenges is crucial for developing successful solutions.
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Access to startup funds: The article notes that individuals in their mid-30s to mid-40s have access to more startup funds, thanks to a longer credit history and established relationships with banks, friends, and family.
By providing these insights and drawing on my own extensive involvement in entrepreneurship, I aim to contribute valuable context to the discussion on the best age to start a new business. Entrepreneurship is a multifaceted journey, and success is not confined to a specific age group but rather to a combination of factors such as education, experience, networks, and funding.
