What Is The Best Age To Become An Entrepreneur?

Have you ever asked yourself if you are in the right age to become an entrepreneur? You are perhaps well into your career as an employee and have been contemplating your leap into entrepreneurship for a while now.

Or you are perhaps a young student who aspires to become an entrepreneur, but are unsure if you should gather experience as an employee first before taking the leap.

Either way, we are approaching the same question: what is the best age to become an entrepreneur? This question might sound like it is only relevant to entrepreneurs, but there is actually another group that is actively interested in the answer as well.

In fact, this group is ready to pay a lot of money to get to the answer. What does this mystery group consist of? Take a wild guess. I knew that you would guess right: venture capitalists. These folks wish to maximise the success-rates of their investments.

So, naturally, there exist scientific papers and working papers that aim to answer this question. I am an entrepreneurial-type myself. As I was reading biographies of successful entrepreneurs, I stumbled upon this question out of curiosity.

The consequence is a wealth of data, questionable statistics, and pseudoscience in the name of scientific research. On my part, I have done the analysis so that you don’t have to.

I believe that such information could help entrepreneurs and potential entrepreneurs from unnecessary procrastination and faulty expectations. If you have read this far, this essay is definitely for you; read along.

This essay is supported by Generatebg

The Young Genius Archetype

What would Steve Jobs or Bill Gates or Elon Musk say is the best age to become an entrepreneur? I don’t know, honestly. But what I do know is that all three of these gentlemen started young; very young.

Do you remember how I stumbled upon this question? It was when I was reading biographies of successful entrepreneurs. Guess what? A lot of these biographies describe people who started their entrepreneurial journey really young (survivorship bias, perhaps?).

As a consequence, most of us have this mental model of the ‘young genius’ archetype. That is, most of us believe (either explicitly or implicitly) that to become a successful entrepreneur, one has to start really early.

And it is not just us. Venture capitalists share this model as well. Here is a quote from Paul Graham, the founder of Y Combinator on this topic (source: Nathaniel Rich, New York Times):

“The cutoff in investors’ heads is 32…after 32, they start to be a little sceptical.”

— Paul Graham.

Here is another one from Vinod Khosla, the co-founder of Sun Microsystems and a venture capitalist:

“People under 35 are the people who make change happen…people over forty-five basically die in terms of new ideas.”

— Vinod Khosla

When you think about it, this sounds very similar to success rates in athletics and sports. The athletes typically start very young and retire by about middle age. There are very few sports categories that allow for late bloomers.

So, are venture capitalists right with their intuition?

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Is Entrepreneurship a Youngster’s Game?

Pierre Azoulay et al. crunched the entrepreneurial numbers in a working paper titled “Age And High-Growth Entrepreneurship” (I am linking this paper at the end of this essay). This paper is based on datasets that involve the United States only. But still, the information is worth taking a look.

When Azoulay et al. computed the mean founder age for the 1 in 1000 fastest-growing new ventures, the age turned out to be 45. That is interesting, isn’t it? Could this be a one-off?

Well, they repeated the studies across several verticals and focused on high-growth rather than plateauing (satisfied) business owners. This was the result:

“Across the 2.7 million founders in the U.S. between 2007–2014 who started companies that go on to hire at least one employee, the mean age for the entrepreneurs at founding is 41.9.”

— Azoulay et al.

Furthermore, these authors go on to calculate your likelihood for success as an entrepreneur based on your age as follows:

“Conditional on starting a firm, a 50-year-old founder is 1.8 times more likely to achieve upper-tail growth than a 30-year-old founder.

Founders in their early 20s have the lowest likelihood of successful exit or creating a 1 in 1,000 top growth firm.”

— Azoulay et al.

That is indeed an eye-opener, isn’t it? This just goes to show that we should not blindly trust our mental models. The lesson here, then, is pretty clear: Entrepreneurship is not necessarily a youngster’s game.

However, there are a few issues with this research that I would like to point out.

Statistics is Hard

Social science uses the business of likelihood to make predictions. ‘Likelihood’ and its related cousins like ‘expected value’ are rather useful tools; but only under specific conditions.

We can take likelihood calculations seriously only when the law of large numbers/expected value applies. I have covered this topic extensively in my essay on how to really understand expected value. If you are interested, check it out.

The issue with the paper from Azoulay et al. is that there is no rigorous proof that the law of large numbers applies to the data concerning U.S. entrepreneurs.

Furthermore, the research begs the question. In simpler terms, the authors seem to take for granted what they are supposed to prove.

I also read papers with opposing viewpoints. It’s the same story but in the other direction. If you ask me, ‘social science’ is the biggest scientific sham of all time (a topic for another day).

Nonetheless, there is still some useful information we can gather from the research efforts. Using some of this data, we might just be able to answer the question that set us on this journey originally.

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What is the Best Age to Become an Entrepreneur

Check out this plot from Azoulay et al. that features the age distribution of startup founders in the year of founding their business:

For starters, it does indeed make a good case for their claim. However, because of the aforementioned reasons, I strongly recommend that you take their results with a pinch of salt.

What, then, can we derive from this plot/data? Within the dataset that the authors were studying, it is indeed true that the majority of the ‘successful’ entrepreneurs were aged around the 40 mark.

But note that the plot does not vanish for founders who are 20 years old or 60 years old. So, who can predict with certainty if your journey will NOT land you spot on such a plot? The answer: no one!

Entrepreneurship is a risky business. If you are aware of the risks and prepare yourself as much as possible, there is actually NO best age to become an entrepreneur. In other words, the best age is your age now. This, of course, is my strong opinion, and not science.

On the other hand, if I were a venture capitalist, I would be looking for under-appreciated older talents with experience just as much as younger entrepreneurs with skills.

Don’t get me wrong. I don’t think we can do reliable statistics with the data. But venture capitalists can try to predict (and afford to lose money).

This is because they carry a portfolio of investments. But an entrepreneur does not carry a portfolio. So, you cannot afford to take a gamble on the best age to become an entrepreneur.

To reiterate my strong opinion, as long as you are aware of the risks and are as best prepared as you can be, the best age to become an entrepreneur is your age now.

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Reference and credit: Azoulay et al.

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Further reading that might interest you: 

• Startup Ideas: Is There Value In Ranking Creators?
• Apple Charges More Money For Its Products In Europe. Why?
• I Accidentally Almost Started A Business. Here Is What Happened.

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