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There’s been a lot of discussion recently about whether younger or older entrepreneurs are better. Of course you can cite examples on both sides. For every Mark Zuckerberg there’s a Steve Jobs.

Who is better? It’s hard to say. Getting past anecdotes, the hard data shows that older entrepreneurs have a higher chance of success than younger entrepreneurs. This is not surprising because experience does matter.

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However, it also seems to be true that younger entrepreneurs have a higher chance of a home run (greater than $500 million) exit from a company they founded.

On the surface this may seem counterintuitive, but it’s not. It’s entirely consistent with the first set of data showing that older entrepreneurs are, on average, more successful and less likely to fail.

Swinging for the fences, as younger people are likely to do more than older people, increases your chances of failure. It’s also something that you learn from experience is usually a bad decision as an entrepreneur.

Of course sometimes it works, but those times are very few compared with the times it backfires and costs you dearly. So the higher percentage of younger entrepreneurs hitting home run exits is exactly because they’re less experienced, more risk seeking, and either don’t know or choose to ignore the higher chance of failure involved with pursuing a swing for the fences strategy.

Similar data has been shown not just with startups and exits but with a wide variety of business, investing, and other professional activities. Whether it is athletes, politicians, hedge fund managers or traders, younger professionals are more likely to do extraordinary things but also tend to make more mistakes and fail more often.

One consequence of experience is a higher awareness of risk, whether you like it or not. Sometimes this higher awareness of risk makes people better. Steve Jobs was fired as a younger CEO only to return and become probably the best and most successful CEO in the history of the technology business.

Sometimes it just makes people too conservative and works against them. Sometimes youth and inexperience combined with talent give you just the right stuff to do things other people thought were impossible or didn’t realize would work.

Mark Zuckerberg and other mostly young people built a business with 700 million users that is currently valued at $50 billion in less than 8 years. However, much more often young entrepreneurs fall on their face and need to be bailed out or suffer the consequences of their bad decisions.

The trade off is clear. Higher risk, as always, creates the potential for higher returns. The key word, as always, is potential. Potential for higher returns does not mean there will be higher returns.

One of the easiest places to track specific performance by age is with hedge fund managers. In this case, it’s clear that middle-aged managers in their early 40s typically generate the highest average returns for investors. Although there are some younger and some older managers who are at the top tier, the example from the hedge fund industry shows that some experience, but not too much, helps to produce the best results.

For traders, the average age tends to be younger. For private equity managers, the average age tends to be older. So even in the investment business, there isn’t one ideal age for producing the best results.

As an investor, what it means is that you should consider the age of entrepreneur and how it relates to your own investment strategy and risk tolerance. If you want to swing for the fences and have a high risk tolerance for losing money, the younger entrepreneurs may be a better fit for you. If your risk tolerance is not as high and you’re happy with making a good return on your money but not hitting it out of the park, older entrepreneurs may be a better fit.

Diversifying your angel or venture investments with the age of the entrepreneur in mind may also be an interesting portfolio management technique to consider. It’s not discriminatory. It’s just learning from the data and incorporating it into your decision process.

As an investor, that’s part of your job.

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