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Is there age bias in VC investing?

I recently waked into a pitch meeting for a social networking related business and was surprised by what I saw. I had interacted with the entrepreneur over email – taking a look at the initial business plan and setting up the meeting – but we hadn’t met in person before. In front of me were three guys in suits, each in their late 40′s or early 50′s, with an older Dell laptop and a paper print-out of some product ideas. And as I sat there listening to their pitch I couldn’t help but think about how differently I might have reacted if this team was in their 20′s or 30′s, dressed in full tech/nerd hipster outfits (or at least jeans and sneakers), and whether there is a negative age bias in venture capital. Here were three guys with 20-30 years of business experience, but I was having trouble getting past my expectation of what they were going to look and act like, versus what was in front of me.

An LP of ours once asked a question that dealt with a similar subject (ironically, although we were in our Boulder office and the LP in question was in jeans, my partners and I were all in sport coats, as we always are when presenting to our investors). I can’t remember exactly how he phrased it but it was something like: “When do you guys get to be too old to do this? To relate to the younger entrepreneurs who are starting companies in the investment areas in which you guys focus.” To be quite frank, this question had never actually occurred to me before. Likely because I still think of my self as young and hip (although I am neither). And because I figured that as long as we are passionate about what we’re doing, we’ll relate to entrepreneurs who have that similar passion (some variant of that is how we answered our investor at the time).

But actually it’s true. Certainly there is some amount of age bias in venture. Early stage tech is considered somewhat of a young person’s game. And while I’ve worked with many very experienced entrepreneurs who were and are fantastic, I wonder if the initial pangs of question I felt on entering a room with 3 middle aged guys in suits pitching me their business plan is something that is deeper than a momentary hesitation.

I’d love your thoughts on this.

October 12th, 2011     Categories: Company Formation, Venture Capital    
  • http://reecepacheco.com reecepacheco

    aw… c’mon Brad… you’re “hip” at least. ;)

    but “young” is as much how you feel and act, in which case you and at least Jason @ Foundry (haven’t met everyone else) are young at heart for sure

  • Judy Shapiro

    The bias is not against AGE per se – but against ventures with a “set” vision, team and strategy. 

    In my experience, a tech startup with younger CEOs that can be molded by VCs which is not what a seasoned team would want. 

    In fact, I was overtly told I was not investable because I was too set in my structure and the VC expected to shape my management team. Uh – I dont think so. Most of these VCs lack the depth of experience in the space I am working – so their “help” on that front is not “helpful.”

    Startups with younger CEO give VC far more wiggle room. Startups by seasoned people (not just guys BTW) have a far more rigorous approach – something VCs dont value in early stage investments. 

    Just one woman’s view from the inside :)  

    Judy Shapiro 

    • http://www.sethlevine.com sethlevine

      It’s an interesting comment, Judy. Certainly VCs do like to have teams that are “coachable” but like everything there’s often a balance between coachability and experience (and they’re certainly not mutually exclusive). Perhaps VCs are less threatened by younger founders. Or they’re just bossy by nature (we all know that’s true!).

  • http://alum.mit.edu/www/lamont ilamont

    Aside from their age/appearance, did anything about their background either feed into the stereotype or help negate it?

    • http://www.sethlevine.com sethlevine

      As I think about it it was probably the appearance that really got me (which was exacerbated by their age). If they had showed up in jeans and sneakers, their ages may not have been as apparent or as big a deal. But they brought it front and center by their appearance, the presentation itself, having a handout (the way the handout was formatted, etc). And, of course, the fact that they were pitching a social networking business which I associate with a younger user and company demographic vs. say an enterprise software company with which I don’t have those same associations.

      • Jessica Lim

        Maybe it was this particular group’s lack of self-awareness- a lack of acknowledgement from them that they know that they don’t fit the mold pitching a new social networking related business as ‘older’ guys and could have addressed it upfront. That likely would not have changed the outcome, but may have left a better impression? As a 33 year old, Asian, female entrepreneur, I appreciate this topic and your self-awareness in questioning the bias :) .

  • http://twitter.com/KyleBWeiss Kyle Weiss

    This is an interesting topic.  It seems everywhere you look there is someone commenting on “don’t discount the young guy.”  The young guys are often the more risky, less experienced bet with a higher payoff (if they can change the world).  But I strongly believe innovation does not have to come from youth.  I am curious to know if you decided to fund their idea or not?  Did you find they “did more homework” in their space or were better equipped to move the idea forward?

    • http://www.sethlevine.com sethlevine

      I’m not going to move forward with this company – not because of the team but because I just didn’t get excited about the idea. I wouldn’t draw too much from that – we obviously don’t fund the vast majority of the businesses that we take meetings with. I was also thinking about some of the other founders I’ve worked with over the years and not all by any means are in their 20′s (or 30′s). LIjit – which was just sold to Federated – has a founder in his 40′s and he’s one of my favorite CEOs to work with…

  • http://freepository.com John Minnihan

    The cliche abt first impressions rings true because we (silly humans that we are) use visual data to assess our world, assigning risk so that we can make the fight/flight decisions quickly enough to save our lives.

    We’re (happily) no longer daily making those decisions for that reason, but our brains still categorize the visual stuff.  But now, the ‘alert’ occurs when the assessment produces cognitive dissonance (a =//= b), or in this case, ‘social network startup =//= middle-aged dudes in suits’.

    I’m older than most entrepreneurs, but I offset that (unintentionally, hey) with my dress, demeanor + 14-year-old-boy sense of humor.  I haven’t worn a suit since… well, it’s been a looong time.  I like to think that what folks see/hear from any interaction w/ me is consistent across time.  I’m always learning + adapting, for sure, but it’s *consistent*.

    Contradictions are what give me pause.  I’d ask the dudes abt it + see where that goes.  They may be smack in the middle of their own adaptation.

    • http://www.oobium.com Jeremy Dowdall

      “They may be smack in the middle of their own adaptation” – love it!

    • http://www.sethlevine.com sethlevine

      I think that’s the right observation John. We can’t help but have initial impressions inform how we approach a meeting like this. And it was the dress as much as the age that threw me (but to be completely transparent here, a few times I’ve had younger entrepreneurs dress up to come meet me and the bias doesn’t work in that direction – I just see them as dressing to impress, not somehow oddly overdressed…).

  • Chgo714

    I have wondered about the same thing…I am presently involved with a couple of my pals that are pushing a concept through development stages…We are all in our 50′s and are dealing with a much younger crowd…We’re all comfortable dealing with the younger guys, but I have wondered what the younger fellows thought of us… We are very excited about ‘our product’, hoping the excitement translates well. Could be there is a whole new market for us older guys that still have a fire in our bellies!

    • Judy Shapiro

      Agree completely – EXCEPT with this this bit:  ”Could be there is a whole new market for us older guys that still have a fire in our bellies!”

      Let’s not forget the ladies please ;)  

      • http://www.sethlevine.com sethlevine

        some day judy i’ll actually get up the courage to write about my experiences working with both male and female entrepreneurs (it’s such a lightning rod issue, i’ve been reluctant to write about it). while i’ve worked with far more of the former, some of my favorite CEOs were in the latter group (but not always). and i’ll finally now be working with a female CEO in the foundry portfolio – deanna brown of federated media. sad that 1) there aren’t more women in tech and 2) that she’s the first female CEO in the foundry portfolio.

        • Judy Shapiro

          Indeed the general topic of gender and tech ventures is a lightening rod topic.

          It always amuses me (somewhat perversely I confess) when I see the pillorying  any male blogger gets when he attempts to answer the question:  ”Why are the so few women in tech” Its a question that seems to defy useful conversation (I wrote about it here: http://bit.ly/pH9mju). 
          I can only imagine what might happen should you pen such a post (“experiences working with both male and female entrepreneurs”).I suspect you will have a lot of comments to respond to. I for one, would love to read you thoughts. 

          Let me know when you have the chutzpah to publish it. I’ve got your back as it is a worthy area for exploration. 

          Judy Shapiro 

          • http://www.sethlevine.com sethlevine

            it’s a great piece judy. thanks for sharing it. in particular this paragraph resonated with me (based on my own experiences):

            *Women are far less likely to be in love with the technology for its own sake vs. their male counterparts, so they tend to be low key in talking about the technology itself. You’re not likely to hear a woman say that her technology is “sick,”*

    • http://www.sethlevine.com sethlevine

      the older i get, the more i hope that’s true. i was thinking today about some of the entrepreneurs i’ve worked with over the years, and for me there’s not a strong correlation between age and either success or my enjoyment of working with them. it’s more about the specific person. that said, i’d be more likely to trust a younger set of founders working on certain kinds of businesses….

  • Daniel Horowitz

    The starting sample is likely biased, but you can look at what percentage of young founders funded/pitched vs older founders funded/pitched. 

    But, those pangs are your sub conscious signalling you that this pattern doesn’t match. That’s gut feel. That’s intuition. That’s also bias. (Naturally, this can be a positive bias.)

  • http://twitter.com/sandman_va Dave Sandrowitz

    I think this is a very important question and really begs to be explored more.  Is there ageism when it comes to early stage, or really any stage, in the investment cycle?

    I’m no investor, but I would have had the exact same assumptions and reaction given what you described above (a social networking business).  If they had a product targeting baby boomers or their parents, then I’d probably have expected them to be 40+. And, if that was the case, they might have a far better perspective on their customers than a few kids fresh out of college, making age an asset.  But, it does not sound like any of that is true in this particular case, making the disconnect between what they want to do and who they all the more apparent.

    I wonder if this is just the age itself or the symbols that indicate that their age is an issue.  Being in their 40s or 50s is one thing, but bringing an old laptop, wearing suits, shuffling papers…it all suggests that they might not “get” what it means to do business in tech in 2011.  Maybe they can build a company, but can they build one that is based on current/coming tech and trends, can they connect with a younger, more connected audience, can they wrap their heads around new approaches and business models?  Can you see these guys trying to attract talent and conducting interviews in suits and ties?  It is easy to question their abilities to do any of that when the tools they are using, the signals they giving off, seem to suggest a bunch of people who are only fit to do enterprise software sales circa 1995.

    Question is, should it matter?  Is it fair or reasonable to judge them for any of this?  Would it matter if they got cool haircuts, put on hipper clothing, and showed up with just an iPad?

    • http://www.sethlevine.com sethlevine

      the third paragraph there is the key. and really the heart of the matter.we all pick up on various things in any interaction we have and they inform our thinking about them. in this case age was one (and as you point out age relative to what the business idea was) but everything else added to the picture as well…

  • Bhickey

    Last week we (myself and 2 partners) met with one of the large real estate Internet portals at their hotel in Chicago.  We were there to discuss a strategic partnership or a tbd business alliance.

    Before the meeting, we (at our Company) talked about attire.  I said that I will be in jeans and button-down shirt (tucked in) and hiking boots. My associates opted for nice slacks, dress shirt, nice shoes.

    Why would we even give our dress code much thought, in the old days, we all would have been in business suits, then maybe moved to sports coats – now, we know, the power-play is ultra-casual.  IMO, the most dressed-up guy in the room is usually selling something, and what they are selling I usually don’t want to buy.

    We are those guys in our early 50′s and late 40′s.  Most of us have had success doing other things.  We are experienced and proven.  But, like you allude to, the thought of being thought of as too old to be cool, much less have a cool/good idea that only some 20 something should have created and developed does take up some of my brain space.  

    But, I think we all can agree, good ideas, the ability to execute, manage etc. is not a function of age.  Ray Kroc was 52 when he started McDonald’s – most VC’s probably would have liked to be in on that one.

    Remember, once the “old guys” get the $ – chances are they will hire “young guys” to bring in the tech stuff.

    BTW – the guys at the Internet company (from San Francisco); 2 in jeans, one with a button-down shirt, one (20 something with the laptop) in a t-shirt, and the boss wore a suit (no tie).

  • Yesuifen20

    past my expectation of what they were going to look and act like, versus what was in front of me.

  • Dbrand999

    I think bias is shown in results more than impressions – one of the reasons you may not fund that group (hypothetically) is that you think they wouldn’t connect to their user base, they won’t be able to work for 72-hours straight coast-to-coast to build a base of business, or that they will somehow or other not get the job done.  And you’d be right.

    That’s not really bias, necessarily.  If you start dismissing potentially good/great entrepreneurs out of hand because of a few grey hairs, *thats* bias.

    • http://www.sethlevine.com sethlevine

      there’s no question that’s part of the thought process. but that’s a slippery slope and one that i think we need to be careful about. it’s one thing to say that they may not connect with or have insight to their user base (totally agree and it’s completely relevant). it’s another to start down the slope of whether the founders have families, etc. and maybe wonder if they can put in the time (my experience is that they do put in the time, but that’s for another post, i suppose).
      and, of course, your last point is right on. if the reason you dismiss someone is because of age – that’s age bias (and bad investing).

  • http://one.valeski.org Jud Valeski

    love this topic!

    I’m obviously bias b/c I’m “old” (38 yrs).

    Great ideas can come from anyone, at any age. I don’t bias idea reaction based on age at all; ever. My 9 yr old kid has incredible ideas about products/business/technology; as do my parents.

    I am heavily biased when it comes to execution. The younger the ppl/person is that is planning on executing, the more challenge they have ahead of them. I have too much experience that shows in-experience (related to youth) in execution results in failure. If the goal is “fail fast” to gain experience, I’m a huge supporter. If you’re inexperienced and you think you can execute, I appreciate the confidence, but tread carefully. Know your limitations… don’t be cocky. Confidence is crucial of course, and in the rare case that’s all it takes.

    Folks that have battle scars/experience are worth their weight in gold. Of course, too much “experience” can result in inflexibility which is it’s own challenge.

    I’ve found tremendous power in the blend. A team with “experience” *and* youth is an incredibly powerful combination. The experience in the room can build software with fewer pitfalls, and the youth in the room can ensure effective market entry/integration, and modern product/UI metaphors.

    From my POV, programs like TechStars try (successfully) to impart “experience” on youth (and vise versa); smart.

    Regardless of your age, if you’re at the execution stage of trying to build something, and you look around the room and see everyone’s within a couple of years of each other, I’d argue you need to be worried.

    On another, related, point, I do worry that there’s a huge wave of high-level application development taking place, and when/if a minimally viable product catches fire, there’s no horsepower on the team to know how to scale/execute in the new scale. That split is often reflected in age. Younger == higher-level app frameworks. Older == system-engineering. This is a dangerous trend IMO, and I worry that modern VC is fueling it.

    • http://jonathanhstrauss.com Anonymous

      I just turned 31 and *I* feel old in this business. So I can only imagine how you feel Jud :-P .

      You make some great points on the execution and technical sides, and I won’t even bother to argue whether or not age plays a factor in having good and relevant ideas. But I believe you’re missing the less tangible and arguably equally important, at least from an investor’s perspective, factors of motivation and risk tolerance. Not to say that older individuals can’t possess significant ambition or vision (R.I.P. Steve Jobs), but there’s a reason “young and foolish” is a cliché. 

      When you’re a conventional venture investor looking for a 1,000% return on 1 company to make up for the other 9 goose-eggs in your portfolio, having a founding team that doesn’t question your desire for them to swing for the fences is a definite plus. It doesn’t mean older people can’t fit into that mold, it just means that in general their experience and personal obligations tend to make them more risk averse.

      When I was considering starting awe.sm as an unattached 28 year-old, the most definitive piece of advice I got was from @iancr:twitter who told me I was at the optimal intersection of experience and risk tolerance to start a company. In other words, the incremental experience I could gain by waiting longer had diminishing marginal returns compared to the likely decrease in my risk tolerance from getting older. And looking back 3 years later, he was entirely right — I couldn’t have done what it took to get to this point if I had more than just myself to worry about.

      This can go too far the other way IMHO when you have a kid straight out of college who believes that living off pizza and ramen is a good trade-off for not having to get a “real” job for as long as this gig lasts. And there are plenty of people over 30 who are willing to put in whatever it takes to make their vision a success (e.g. Gnip ;-) ). So in the end I think motivation (e.g. to change the world, to get rich, to have a steady paycheck, to avoid getting a “real” job) is a key factor that investors need to suss out one way or another and age is, for better or worse, a superficial indicator for motivation.

      • http://www.sethlevine.com sethlevine

        great comment jonathan.

        and i’d point out that i’m even older than jud, so you can imagine how i feel! (not that much older jud! don’t get too excited about it ).
        this has been such an interesting question to dig into. and the idea around the intersection between risk tolerance and experience is a super interesting concept. depending on what you’re doing (and how you fund it and how much money you’ve made along the way, and how you live your live, and … and … and) there are likely several points of equilibrium. but that said i have made the comment before to someone that “now was the time to start something” and what you describe below as the advice ian gave you is pretty much what i had in my head when i said this…

      • http://one.valeski.org Jud Valeski

        No question risk tolerance is often a function of age, and that that is often the appeal of a more “youthful” crew. Naivety can be an incredibly powerful thing, especially when you’re swinging for the fences; “know no bounds.” (literally).

        It feels kind of akin to sports drafting/hiring. Teams (VCs) want to win, and they often go recruit younger and younger players in an attempt to get that one-in-a-million under their thumb. That strategy is appealing in the every tightening quest for talent that can execute, but the 16 yr old kid beating his chest about how he’s going to be an NBA all-star is obviously a losing proposition (statistically).

        All comes back to blend in my mind. Too much of any one thing gets you in hot water.

        I’ll never forget starting a company with some friends in 1999. We were all in our 20′s. We all “worked all day” (say we were at the office for 18 hrs per day on average) b/c we didn’t have any “baggage” tying us down. After a few weeks I looked back and realized that we weren’t working all day at all. We played video games and ping pong for half of that time, leaving us with a pretty typical 8 hrs in the saddle. We were fooling ourselves, and I think that’s often what happens when VCs put too much value on youth. We were idiots that should have been working smarter, not more.

    • http://www.sethlevine.com sethlevine

      great comment jud. and i agree (and have seen) what you’re talking about in the last paragraph. dangerous indeed.

  • http://twitter.com/Rick_Mason Rick_Mason

    I admit to being shocked and to be honest a bit depressed as an older guy when I saw Dave McClure’s answer to this very question:

    http://www.quora.com/In-the-eyes-of-a-venture-capitalist-how-much-of-a-detriment-is-it-to-be-an-unknown-founder-who-is-40-or-above

    I wondered at the time what your answer (or Fred Wilson’s) might be to this same question.  Hasn’t Dave McClure heard of late bloomers?  Shouldn’t the team, the market size and whether they can execute be the main consideration?

  • http://twitter.com/spencerrascoff Spencer Rascoff

    A brave post Seth, to admit what everyone knows but is afraid to say.

    If it makes you feel any better though, I can make a case that a team’s age and “UI” is actually an important part of the whole package, if only because recruiting is such an important part of a startup’s success or failure. If you don’t think a management team can recruit great people, then don’t invest. And, for better or for worse, an exec team’s UI (whether that means age, or other parts of the package)  can impact recruiting.

    • http://www.activetheoryinc.com Alex Gourley

      Older founders, especially older technical founders, can have a huge advantage in recruiting. This is because usually they have personally worked with hundreds of engineers. 

      a) They can source from this pool to make the early team
      b) They can effectively hire, having seen all the patterns in people before. 

    • http://www.sethlevine.com sethlevine

      the UI comment is right on Spencer. and as i’ve thought more about it, it was the UI disconnect that really threw me more than anything else.

  • Kendal

    No one is addressing the elephant in the room. VCs prefer younger entrepreneurs because VC money is largely a game of pimping the inexperienced. Newbies won’t argue deal points and won’t resist when VCs strong arm them to place their own people in management positions and pick board members.

    Experienced entrepreneurs, or those with long domain expertise (generally people in their 30s,40s,50s) won’t simply rollover and obey orders. Why? Because they actually kind of know what they are doing.

    So no, tech startups are NOT a young man’s game, but getting tech VC money today largely is. Luckily, with the newly low cost of seed capital needed for tech ventures, VC money has never been more unnecessary. In most cases for truly viable, profit oriented tech startups, VC cash is more of a luxury. VCs know this, that’s why they court the young and inexperienced who mostly don’t know any better and will give away the farm early.

    • http://www.sethlevine.com sethlevine

      i can only speak to my own experience and say that this really isn’t the case. in fact we strongly believe at foundry that educated entrepreneurs (of any age) are better entrepreneurs. which is why we’ve been so open on our blogs about how the vc process works and why my partners jason and brad put out their venture deals book (which really strives to close this information gap that you describe below). i’m sure this happened all the time in the past, but i’ve generally found both younger and more experienced entrepreneurs to have pretty sophisticated understandings of deal structure and deal terms. and certainly we would never “take advantage” of someone’s relative deal inexperience (with the understanding that my version of fair may not always match yours). do you have specific examples of this happening? i’d love to hear about them (you know what i think of some vc’s …. (read my “beware of asshole vc’s” post if you haven’t already).

  • Blakerr

    I am a seed-stage VC investor and have much the same thoughts, with a few differences. I don’t run into many middle/late-middle aged start-up entrepreneurs. But, when I do, have internal questions about their life background and whether they are looking for VC as an income replacement. I also wonder whether they can hack an extended “ebitda-negative” stage, and have the necessary do-it-yourself or manage someone closely, technical skills and know-how in their technology product area. The older I get, the more I wonder about the obverse for me, but it is not as bad if you stay abreast of the domain area.

    Two years ago, I ran into a guy who was still involved in early-stage investing at about age 84. he seemed quite healthy. But sadly, as can happen at that age, I found out a month later that he had died suddenly a week after I met him. He left this world doing what he wanted to do, and probably helped form many businesses.   

    • http://www.sethlevine.com sethlevine

      I hear you Blake. I wonder that myself sometimes…

  • Anonymous

    I’ve been there, Seth, and totally agree. We walk in with expectations, and whenever they’re not met, it can knock us off a bit. But if these guys could demonstrate that they really do get it. . .that they’re active participants in the social media world, etc., then that could be perfectly fine.

    However, there’s something that you don’t call out that really does send a bad signal, independent of age. These guys clearly hadn’t done their homework. They didn’t understand their customer. And even worse, they demonstrated that they were out of touch with the market. You don’t have to do much homework at all on Foundry to understand that this isn’t the right approach. And it’s the wrong approach for pretty much any VC investing in social media these days.

    The interesting question, I think, is which would you have reacted worse to – guys in their 40s credibly dressed in full hipster garb and without the paper printouts, or 20-somethings in suits with bound copies of their pitch?

    • http://www.sethlevine.com sethlevine

      it’s a great question brad and you’re on the exact right path. and the truth is that i would have reacted much more favorably to younger guys in suits (it would have been somehow kitch, or at least indicate they were trying to impress) vs. the older guys in front of me in suits. and probably more favorably to anyone dressed more casually (to your point, it would have indicated that they had done some homework!).

  • http://twitter.com/i_MacPhail MacW

    “As a ‘Boomer’, I pledge that I won’t let my VC’s youth and inexperience become an issue.”

    (ROFLOL….and, hoping I haven’t misplaced my Clapper)

    PS.  Dell makes a laptop now?  I need to get the van to drop me off at Sam’s Club more often.
            Guess it’s time to replace my Etch-A-Sketch (it was the first tablet)

    PS(iterated).  I can get you a deal on ‘pang’ medication through AARP  

    PS(pivoted).  And, thank you Judy Shapiro.  Your equilibrium appears intact

    • http://www.sethlevine.com sethlevine

      nice!

  • http://twitter.com/i_MacPhail MacW

    Mac (the ‘Boomer’ that named Dick & Jane’s company….sayahh.com)

  • Yesuifen20

    cause I still think of my self as young and hip (although I am
    neither). And because I figured that as long as we are passionate about
    what we’re doing, we’ll relate to entrepreneurs who have that similar
    passion (some variant of that is how we answered our investor at the
    time).
    But actually it’s true. Certainly there is some amount of age bias

  • Yesuifen20

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    to access premium content relationships and advertising. Lijit brings a
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  • http://hireflo.com Rudy Lacovara

    Is there an age bias?  I think the answer is absolutely.  A more interesting question to me is should there be an age bias.  Like most things people consider “unfair”, the age bias is there for a reason.  People in there 20′s embrace change, act faster, have more tolerence for risk, and don’t know that what they want to do is impossible.  I think it’s rational to be biased in favor of these types of people when investing in early stage tech companies in the same way that I think it’s rational to be biased in favor of graduates of Stanford.  BTW, I’m a 41 year old (not 21 year old) startup founder who graduated from CU Boulder (not Stanford).   

    • http://www.sethlevine.com sethlevine

      Fair. But many of these traits sound like just that (traits) and are not necessarily age based…

  • http://www.buywigonline.com Yesuifen20

    This is a real pitch.  It’s not any different than if someone comes to our offices, but there is a “studio audience.”

  • http://twitter.com/willsteward William Steward

    A very interesting topic, if not purely because I’m a 20y/o who sold his first business earlier this year, to devote my time to focussing on a new start-up that I formed with my mid 50′s father last October ;) . I’ve also taken the year out from university (and longer if it’s as successful as we’re betting) so that I can be 100% focussed on it. As you can imagine we’re combined a bombshell of all sorts of questions from potential investors – whether they’re actually directed at us, or kept in their mind. 
    If nothing else this year in attempting to form partnerships with other businesses, selling our product into companies and meeting so many people – I’ve learnt that judging people on something like age is almost always the wrong thing to do. Most people at my age are doing very little. Most people my father’s age are entirely risk adverse. I ran a business through much of my teen years through to acquisition, and my father is taking a huge amount of risk onboard by leaving a full-time secure career to pursue this start-up. Our attitudes to risk are largely pretty aligned. Surely we should be judged based on our own achievements and actions, rather than the stereotypes associated with a particular age group? 

    My father brings a perspective to discussions which I do not have, having been working in industry for 30+ years as a consultant. I see things from a younger, “guy that lives on the internet” perspective, which is perfect for developing and marketing our consumer product. 

    I think a lot of the reason that VC’s tend to be “anti-older” is the other commitments that an older founder has. A young founder can work on a start-up around the clock without having to worry if his kids are doing well in school, or if the lawn needs mowing. I think a partnership of the two works fantastically, bringing in the best of both worlds, but then, I would say that ;)

    • http://www.sethlevine.com sethlevine

      I think I agree with you that balance (partnership…whatever you want to call it) truly is the best of both worlds. Plus it sounds fun to run a business with your dad!

  • http://www.buywigonline.com Yesuifen20

    et to be too old to do this? To relate to the younger entrepreneurs who
    are starting companies in the investment areas in which you guys focus.”
    To be quite frank, this question had never actually occurred to me
    before. Likely because I still think of my self as young and hip
    (although I am neither). And because I figured that as long as we are
    passionate about what we’re doing, we’ll relate to entrepreneurs who
    have that si

  • http://www.kstn.biz/ Dellas

    good ideas, the ability to execute, manage etc. is not a function of age.

  • Dave W Baldwin

    I think the ideal would be a mix… And that goes for the investment side also.

  • FlavioGomes

    Funny how things change…when I first started up I lost count of how often I’d hear…”some gray hair might help”..

    Aside from some styling mistakes with the old dell and print-outs; I suppose its all about how much you value wisdom and the scar tissue from 30 years of making mistakes.

    If the plan made sense, management/founders had credible experience and you sensed fire in the gut then I’d give them odds that they’ll do as well as 20 year old’s.

    Just think…if they’re 40-50 years old and insane enough to get into a start up situation again…that says a lot.

    I wouldn’t over think it..and in fact, you might just discover a new investment niche

  • Winkieboy

    the older is the entrepreneur ->  the higher is the probability to become a successful corporation -> most of the time funded by corporate C-level people / individual investors. For example Salesforce.com, Marc Benioff (35 years old in 1999)
    the younger is the entrepreneur -> higher probability to exit in the short-term -> most of the time funded by angels / VCs. For example search whatever word in Crunhcbase.

    I would love to see a study on this.

    • http://www.sethlevine.com sethlevine

      agreed.

  • Javier

    Of course there is, and that is why among other things success rate of VC is so low, they are dealing with their own insecurities when they try to mingle with younger people so they can feel innovative by default and young, just as Seth said, most VC are neither young nor hip, but looking from outside it can look like a very sad picture

  • Javier

    Just to add some additional thoughts:
    1. There is no secret sauce, therefore age, sex and …. should not matter.
    2. VC looking for previous failure? Failure perse does not guarantee anything, Learning from previous failure normally takes time to demonstrate which is closer to be proven with “experience”
    3. VC look for coachable teams? We should all look for new and continous learning experience, Willingness to learn is something that comes with each person and not with age.
    4.- Creativity/Innovation comes from need, experience and discomfort, specially the capacity to question everything from yourself to frameworks and mental models. Is this comes just with age is a scam if this comes with the individual, it will be true at any age.
    5.- Risk aversion? Younger people are willing to take a bigger shunk of risk. True in most cases. Nevertheless if someone in the late 50′s which are still 20 years ahead for me, that guy is taking an even bigger risk than someone at my age and if that person has a proven track record, that is someone I would want in my team, taking and managing risk is a skill in itself.
    6.- VC want a fast exit? yes, for those who don’t they get the google, facebook and all the other start up capable of surviving in the long term and generating real jobs, that come with the minimum amount that certainty that non risky people love to have and help them fuel back the economy.
    7. Depending on what you want to do, pick the right VC if you want to look for one, respect their mental model, since time is a limited resource and you should concentrate in your idea and not on changing other people mental model.

    These are not 7 rules to preach, I do not believe that anyone has the right to tell others how to live their life. These are just personal reflections.

    • http://www.sethlevine.com sethlevine

      Well put Javier. Thanks for the comment.

  • Richard Lazar

    Just came upon this post.  A very interesting topic.  I am in my mid-50s (ancient by comparison with others posting here) and about to begin fundraising for my 4th technology company, this one in the social space.  I mentor young entrepreneurs here in Portland but still love leading small/young technology companies.  They say with age comes experience and I hope that is true.  Seth, given your observations, I wonder if you or your colleagues (inside or outside FG) would take a meeting with someone my age even if you liked the technology, category and opportunity.  I worry that the venture community does in fact have an age bias.

  • http://www.heyheyrenee.com/ Bowlhiker

    Good morning Seth,

    First, I could come to Seth with a cure cancer and he still wouldn’t give me a dime.

    “A certain amount of age bias” No, Seth. There definitely is an age bias. I’m 52. I can still kick just 9 out of 10 people’s butts (sp??) reading this on the bike. 10 out of 10 on skis. Back in the day, we used to do the Tuesday night rides down there in the Republic of Boulder on LSD and still be in the front. 

    “Did he just say LSD!!!”

    We can still write code faster than guys half our age. I still have great ideas — that’s what keeps me young. Seth doesn’t think so, but I still give him credit for at least meeting me once.

    For example I’m working mobile video right now. Mobile video makes the browser look archaic. No, Seth, I’m not telling you. 

    I get some of the emails from the Republic of Boulder gang. I’ve gone to a couple of the events down on the front range, and yes, I feel out of place even though I’ve started businesses that actually sell something and have customers that love us. 

    So I’m sitting next to some young twerp who claims he’s the next big thing. Who has the attention span of a 4 year old, who starts talking to me and then answers his phone. Bill Daniels is rolling over in his grave.

    So I ask this kid about himself. He’s working on yet another mediocre at best social media thing based on data mining, that nobody really needs, but that will undoubtedly make him you a lot of money when his all but useless is idea is sold to someone else. I’m thinking, “Excite.com. It’s happening again”.

    I know, Seth. You’re in business to make money.

    But is this kid really making the world a better place? His generation will be known for nothing more than coming up with services that most business block — because they’re time suckers. 

    Does anyone ever wonder? All this money spent on an education at Stanford and the best these kids can do is come up with are products (and I use that word lightly) that they give away for free? Hmm.

    Anyone with pedigree can get money from a VC. Here’s a challenge. Go try starting a business with an SBA loan or a loan from a bank. 

    Back to the kid who’s now tweeting and talking on the phone. I told him if he was going to talk to me he had two choices:
    1. Turn off his phone and pay attention
    2. Turn off his phone and pay attention

    He’s still talking about the grumpy old guy who schooled him, I think.

    Heck I feel old hanging out here. 

    But it’s 4:50am, I’m on my way to the gym to do my workout which the young guys there can’t do. No, I’m not going to do any LSD. Drugs are what we did on our way to being cool. We’re way past that now.

    Then I’ll go to the office and run my business the old fashioned way — which will become fashionable once again, because nothing is ever new, old things are just recycled.

    So no, I don’t have plans to give something away – because in business, you sell something. I still think social media is a social disease, which immediately cancels me out of just about every networking group out there. 

    Back to my new friend with ADD. I told him I thought social media was a social disease. He looked at me like, “Dude. You are so out of it”. 

    Funny. That’s what I thought about him.

    • http://www.sethlevine.com sethlevine

      I think there are a lot more people out there like you – running their businesses, not giving away product, etc. I saw that you read my post on being sick of the bullshit – the frustration you express in your comment is what I was taking aim at there, at least in part.
      We’ve funded entrepreneurs of all ages. And while there’s a stereotype of the kid entrepreneur that everyone thinks about, the reality for us, is that while we do have a handful of younger founders, the average age of the CEOs in our portfolio is probably a lot higher than you’d guess. Of course ultimately its the experience and talent that matter the most, not age.
      But no, I wouldn’t fund your cure for cancer. We’re not bio investors and we know enough to stick to our knitting…

      Seth Levine

    • Richard

      Bowlhiker,

      Some thoughts from the peanut gallery.  Your two posts are not at all persuasive in part because they mix many different issues that have nothing to do with the topic of perceived VC age bias.  Whether you can run faster than a speeding bullet or jump tall buildings in a single bound has nothing to do with whether you have a product or service that should be funded.  Whether you believe young people lack manners or proper social graces is similarly irrelevant.  And the issue of whether VCs fund social media companies lacks any connection to the question of age bias.

      Age bias would exist if a VC looking at two very similar deals elected to fund one over the other solely (or predominantly) because one entrepreneur was older and one younger.  You offer no examples of how this has happened to you.

      If you believe your mobile video product is truly innovative (and not like all the other mobile video apps out there), then validate it with potential customers, build a prototype to show it off, put together a great team, write a plan and shop the deal.  If age bias exists with the VCs you approach there is nothing you can do about that.  On the other hand, if you really do have a good concept, then you will find VCs willing to fund it.  Surely you don’t believe every VC is biased against older entrepreneurs.

      By way of background, I am a baby boomer who happens to be a serial entrepreneur.  While I suspect age bias does exist with some VCs, I know of no data supporting that thesis and I have not (to my knowledge) experienced the barrier first hand.

      One final thought.  To me your posts come across as snarky and arrogant,  And the fact that you personalized it to Seth was trite.  I can imagine your attitude being one reason you have had challenges raising VC dollars.  After all, VCs tend to invest in people they like, trust and want to work with.

      Good luck with your business ventures.

      Richard

      • http://www.heyheyrenee.com/ Bowlhiker

        Howdy Richard,

        So someone comes around who happens to see things different than you and now I’m the bad guy? Science is about taking into account all data, no? 

        I come here and offer a different perspective, then you all the sudden want to say, “Nope. You’re wrong and I’m right. Because I’m a big shot. And that’s the way it is”.

        Do I agree with the VC world? No, I don’t. Do I agree with some of things that happened to tech, which has been my entire career for 24 years? No, I don’t. But what you seem to be saying, is that my perspective is some how off base and I’m not entitled to my observations. 

        I’ve been able to make it the old fashioned way, good for me. Blah, blah, blah. Sound the horns for Paulie. But I’m not here to celebrate myself – I don’t even take myself seriously.

        Have I been rude here? If so, that’s not my intent. 

        I think it was Andy Grove who said, “If everyone is saying the same thing, watch out”.

        I’m not saying the same thing, that’s for sure.

        No one ever won an argument on the Internet, right RIchard? 

      • http://www.heyheyrenee.com/ Bowlhiker

        Howdy Richard,

        You asked for some data.
        http://www.cnn.com/2012/05/30/tech/keen-technology-facebook-privacy/index.html?hpt=hp_c1

        Are you really going to tell me that the world is better off because of social media? Are you here to argue that we aren’t, “Alone Together”?

        If so, I’ll argue with you — respectfully. 

        Years ago I put my money where my mouth was and we jumped off the edge and developed zeldab.com. No, we never did raise any money. But then again, we only asked one person — Seth. Seth, to his credit, was kind enough to meet with me.

        I think age ties in here. Because, the young engineers in Silicon Valley seem to be driven by money — not by doing something great. I’m not the only one who feels this way:
        http://www.nytimes.com/2012/05/27/opinion/sunday/douthat-the-facebook-illusion.html?_r=1

        Here’s another link backing up what I’m saying:

        http://www.theatlantic.com/technology/archive/2012/03/why-silicon-valley-hasnt-built-a-good-health-app/254229/

        And one more:

        http://www.theatlantic.com/business/archive/2012/05/the-golden-age-of-silicon-valley-is-over-and-were-dancing-on-its-grave/257401/

        According to Understand Mobility in America, 

        Education, race, health and state of residence are four key channels by which
        economic status is transmitted from parent to child.I don’t see mentoring happening. I see a selfish business. Maybe my thoughts are a little scattered, but no, I don’t agree with what I see out there. I came here because this blog seems to be a hotspot.What’s the beef?

      • http://www.heyheyrenee.com/ Bowlhiker

        Morning Richard,

        One more comment here then I better DuckDuckGo. 

        It’s my belief that by and large, great companies are not being funded. What’s being funded I believe, are mainly flimsy ideas. I think I posted some evidence backing up what I’m saying. 

        I’m also moaning about the state of tech. 

        You seem to disagree. Fair enough.

        Steve Jobs died and the tech world had a cow. Dennis Ritchie died, it was barely back page news. That’s an example of what’s so wrong in tech. This business is tilted towards money means success. That if you haven’t made a boat load of money, you must not be successful. I think that’s wrong. I think Dennis Ritchie would have agreed with me. 

        I also feel that people in tech have a responsibility to give back and help others who are less fortunate. 

        When I came into the business I came from the poor side of town. Heck I didn’t even finish high school. But I was young and hungry and I found mentors who helped me. 

        I just don’t see that going on today and I’m crying foul. All I see, is money changing hands between insiders. All I see, are the privileged kids making it and other kids getting shut out. All I see, are young kids thinking about how to get rich — not, how to make 100 year businesses. And I’ll offer up as evidence all the free, “you are the product not the customer” websites and apps that dominate.

        I don’t think VC’s believe in 100 year businesses and I think that’s adding to the decay. I think their only concern is to fund startups where they can get paid back quickly, via the startup being sold. That’s fine, good work if you can get it. But I think entrepreneurs would be better off ignoring them, chaining their plans to be more modest and funding their businesses via bank or SBA loans. 

        Of course no VC will ever admit to what I’m typing. Surely, someone is now going to brand me as some sort of misinformed trouble maker who has a thing for VC’s. 

        I don’t see tech people visiting public schools in Denver and talking to kids about the wonderful opportunities in tech. I don’t see blogs talking about giving back or helping those with low test scores rise up. I think the younger generation coming into tech now is obsessed with themselves, no one else. I don’t see blogs where people hang out and help others code, gratis.  

        Seth wrote pedigree matters. I say that kind of thinking goes against, “freedom and equality for all men”.  

        Most of my gripes I attribute to social media. Which brings me back to the topic here, age bias.

        Seth wrote that he wonders about an age bias. Then others chimed in, mostly around a consensus that younger is better. 

        I think they’re wrong. 

        The younger generation seems to believe that free is where it’s at — because that’s where the big money is. 

        Netscape was a great example of free. So is YouTube. But it’s hard to think of many others. But even if one could, I think the overall effect of free has had a negative impact on our society. I think, we’d be far better off if we all paid for what we used. I think our country would be better off if we paid for the Tor Project and quit using Google.

        I think my kids will be better off if tomorrow’s tech leaders would start focusing on making things that people pay for. Instead of making these apps and services that serve no other use than to steal mine and theirs personal information then sell it to anyone who’ll pay. 

        Someone wrote here that older people aren’t flexible as leaders. Tell that to Ray Ozzie.  

        So is there age bias? Yes, there is. I know a few smart, 50 somethings who can’t get interviews and can’t get funding. Not because they’re not smart, but because the tech world is practicing age discrimination. 

        http://www.imdb.com/title/tt1172991/

  • http://www.heyheyrenee.com/ Bowlhiker

    Good afternoon Seth,

    You know, Seth. Your guys have had it wrong. You’ve made a lot of money, so what? How many social media companies have you funded? And what’s the net result to our society? 

    It’s right here:
    http://www.cnn.com/2012/05/30/tech/keen-technology-facebook-privacy/index.html?hpt=hp_c1

    You think this is a young persons game, you’re wrong. You define success as dollar and cents. People my age define it entirely different.

    The tide is shifting, my man. Old guys like me who value customer service and who go visit customers instead of emailing them, will rise again. 

    And when we do, we’re gonna kick some arse. 

    zeldab.com was the right idea, Seth. Way too early, I agree. But I was right.

    It doesn’t matter to me that I invested and never made any money. Because again, my value system is different.

    I think sooner than I think, young people are going to see that it’s Peter Drucker, not Mark Zuckerberg, that they should “follow”.

    I don’t want to typing down to you so don’t get my tone wrong. I’m here to engage, I’ll play fair.

    • http://www.sethlevine.com sethlevine

      I appreciate that you want to engage. And I’d suggest to you that you may have the wrong opinion of what we do at Foundry. We fund innovative ideas regardless of the founder’s age, we have a broad portfolio well beyond “social media” and I think have a pretty measured view of the value of customers (for example, see my post on the freemium myth and pricing – http://www.sethlevine.com/wp/2010/08/pricing-models-the-freemium-myth-and-why-you-may-not-be-charging-enough-for-your-product). Not sure how that translates into thinking this is a young mans game (the four Foundry partners are not exactly young either, by the way). There are lots of great ideas out there – most are not VC backed.