The founders of the fastest-growing American startups are well into their 40s, while the domestic landscape is dominated by youth.
New Delhi: Success seems to come easier for middle-aged men, typically 39 years and above, in the US, a far cry from the perceived domination of youth on the Indian startup scene.
According to a recent working paper from the US National Bureau of Economic Research, the mean age of founders who set up the fastest-growing startups since 2007 is 45 years. This while several Indian studies have pegged the age closer to 30 for domestic ventures.
The paper was based on a study of people who founded startups over the past decade.
“Our primary finding is that successful entrepreneurs are middle-aged, not young,” the researchers say in the paper. “Even when reducing the set of 2.7 million founders to the 1,900 associated with firms that are both in entrepreneurial hubs and receive VC (venture capitalist) backing, the mean age at founding is 39.5.”
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According to the US paper, “very young founders may occasionally be the norm” among “computing-oriented ventures”, but the mean founder age even then is between 38.5 and 40.8 years.
Thirty and thriving
Back home, a 2017 report from IT industry body Nasscom, based on a study of over 2,100 startups founded between 2012 and 2017, estimated the median age of founders at 32 years.
If it’s a startup dealing in advanced tech like internet of things (IoT), artificial intelligence, or drones, the average age rises to 33 years.
In 2016, a Delhi-based data-crunching startup named Xeler8 found the average Indian tech entrepreneur was a male aged around 28-29 years, who received funding once he turned 32.
Karan Mohla, a partner at IDG Ventures India (IDGVI), a tech venture capital fund, said, “At a number of the companies where IDGVI has invested, the age of founders is in the mid-to-late twenties, especially in consumer technology, digital media/content and emerging areas of frontier technology such as gaming, AR/VR (augmented reality/virtual reality) etc.”
“Typically, across the companies and sectors we have evaluated, the average age of founders has been lower in the past five years compared to the previous five-year period,” he added.
Even so, field experts say the dominance of younger founders is incidental, adding that age is seldom a deciding factor for investors, who go by the promise of a given venture.
Indian Angel Network (IAN), a venture capital consortium that has about 74 portfolio startups and has had high returns on investments for nine years, said its investment decisions were not driven by age.
“However, if analysed, the average age of founders we invest in hovers in the mid-30s, ranging between 25 and 45 years of age,” IAN co-founder Padmaja Ruparel added.
“So our founders are not all freshers, but nor are they all senior career veterans,” she added.
Kannan Sitaram, a partner at Fireside Ventures, said, “We look for entrepreneurs who blend youth and experience…” adding that they were generally in their mid-30s to mid-40s.
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“The core target group for most of our investments tends to be affluent, urban millennial consumers — singles, those with young families, who want products that meet their lifestyle requirements,” added Sitaram.
“Our companies reach them initially through e-commerce portals and digital marketing… We look for founders who will understand our consumer, and the digital space,” he said.
Just a number
T.A. Krishnan, CEO of Ecom Express, founded the logistics company when he was 49 years old, while the other three co-founders were aged between 47 and 52 years.
The company was founded in 2012 and reportedly raised about Rs 1,142 crore, becoming operationally profitable in FY18.
Krishnan, however, said he didn’t see a relation as such between a founder’s age and the success of their startup.
“Even in a complicated industry like logistics… There are other logistics startups like Rivigo founded by entrepreneurs in their late 20s to early 30s. They are doing well too,” he added. Rivigo was founded in 2014 and reportedly last raised funding at a valuation of $945 million.
Saroja Yeramilli, founder of modern jewellery brand Melorra, said she hadn’t faced trouble raising funds despite being in her 40s.
“That said, one does hear investors prefer younger entrepreneurs, not realising that experience in running businesses is invaluable in building a sustainable business,” she added.
Sitaram of Fireside Ventures suggested the surge of youngsters leading Indian startups likely received funding because of the strength of their passion, not age.
“Above all, it’s about the passion, drive, and youthful spirit a founder has. That’s what investors look for, that’s what makes them successful,” he added.