Call it the Zuckerberg effect: When we talk about successful entrepreneurs, we often envision young people. But in the study “Age and High-Growth Entrepreneurship,” Wharton assistant management professor Daniel Kim and his fellow researchers showed that the average founding age of successful entrepreneurs in high-tech industries actually hovers around 43. Kim and his team then dug deep into data suggesting that middle-aged entrepreneurs have an edge on the wunderkinds.
Key Findings
The Youth Myth
By examining the five-year stock price multiple as a function of founder age, Kim and crew found that even famously successful 20-something entrepreneurs enjoyed career peaks later in life.
(Left to right: Simon Davis/DFID; Matthew Yohe; Steve Jurvetson; U.S. Department of Defense/Senior Master Sgt. Adrian Cadiz; Stansfield PL)
Growth Chart
In their research, Kim says, there was “this very consistent finding that the likelihood of entrepreneurial success rises with age.”
The Question
What’s the biggest driver of the age effect?
Answer: Prior experience.
The researchers found that the number of years a person spends in the same industry as his or her startup is predictive of that company’s future performance.
The Takeaway
“We’re not saying you should only be an entrepreneur when you’re 45.” Kim says. But, he notes, the link between age and successful entrepreneurship might inform the way students, educators, venture capitalists, and, of course, middle-aged entrepreneurs think about founding companies.
Published as “Better With Age” in the Spring/Summer 2020 issue of Wharton Magazine.
