Are young VCs better VCs?

There’s a great post up on the NYT Bits Blog that asks “Do Young Venture Capitalists Have an Advantage?”  While established (i.e., older) venture capitalists have more name recognition and therefore theoretically access to better deal flow, younger VCs are closer to the technology and have more in common with today’s set of technology entrepreneurs – according to the article – which makes them have an advantage in today’s venture market.

This is a great question and one that I think about a lot as I consider ways to be a better venture capitalist myself. In fact, one of the reasons I started this blog was to shed light on the progress of an individual VC as I rose in the business. As part of this I try to think introspectively about what makes a great venture capitalist and how one hones these skills. Seeing the post on the NYT blog seems like a great opportunity to dive into this question again. And the Times has it wrong in my view – they are playing off of a stereotype which may have some general applicability but misplaces the attribute.

Age is not the defining attribute of a good (or bad) venture capitalist – it’s drive. And while there’s some correlation between being a younger VC (which in our business at the partner level is generally late-30’s through mid-40’s) it’s just not the differentiator. In my view all great VCs have drive. And while having drive won’t make you a great VC, not having it will almost certainly leave you behind. I think the Times is mistaking age for this hunger to work, learn and stay current on technology that characterizes the drive of great VCs. It’s true that many people who have been in the venture business for a while lack this drive and it’s also true that many younger VCs that I know have an incredible desire to work hard and succeed but there are plenty of “experienced” VCs that have been at it for 15 years that still wake up every morning charged up for their day and spend their weeks crisscrossing the country in search of new ideas (my partner Brad comes to mind – he’s by no means “older” at only 43, but he has been in the VC business for a long time and without question has no lack of drive or work ethic). 

I may be over-generalizing but in my world view there are Old School VCs and New School VCs.  Old School VCs are partners/firms that prefer to sit back in their offices, have entrepreneurs come to them, invest only in their back yard and show up at monthly board meetings to offer their wisdom. New School VCs are out in the technology community, seek out new trends and companies, engage with the tech ecosystem (both start-ups and more established companies), invest where their investment focus takes them, aren’t afraid to travel and generally work significantly harder than the stereotype of a venture capitalist. The former aren’t necessarily old, they’re just old school. Likewise the latter aren’t necessarily young, they just aren’t resting on their laurels (or don’t have them yet).

When I think about what we’re trying to accomplish at Foundry Group (and what my friends at similar firms like USV, Spark, True, HW12, etc.) are trying to accomplish I don’t define our style of investing and managing our firm based of our ages. I think about how much my partners and I enjoy our work, how much we care about being successful and how hard we’re willing to work to be so. That drive is not a trait of a young or old venture capitalist – that the trait of successful venture capitalists.

  • Mark

    All good points. But I'm curious, is there any evidence, either statistical or anecdotal, that suggests entrepreneurs prefer younger VC's?

    • sethlevine

      not that i'm aware of mark. it's the right question to ask.

  • Great post Seth. The WSJ article way oversimplified what is indeed an important distinction between “old school” and “new school”.

  • I don't care too much for that article's conclusions. It's based on a few bits of anecdotal evidence. It could have been a useful effort if they had looked at the ages of the VCs who have been making deals in an empirical survey. I agree with you about drive being essential – after all, in what high level business endeavor is it NOT essential?!

  • Lindel

    Did you really just call Brad old? It's fair to say that I agree with your framing, though I do see the benefit of experience as giving older VCs with drive the advantage. It's funny how markets can be different but smell the same.

    • sethlevine

      just “older” 

      i agree with your comment. experience is important and partially why one can’t over generalize that being young gives one an advantage – experience and the ability to pattern map are definitely important pieces of the puzzle.

  • Seth — one thing. The article you are referring to is from The New York Times, not my beloved Wall Street Journal. -Scott Austin

    • sethlevine

      Yikes! You’re absolutely right Scott. I’m really sorry about that. Correction and apology going up now…

  • Let's all hope that VCs invest in winners – winning concepts and winning attitudes regardless of age. A team's age should not get in the way of the realization of a potential value to society or to its investors. This entire notion of start team age reminds me of how some people differentiate based on sex, race, or disabilities. An observation: In a way, the whole notion seems kind of paradoxical. Older VCs (say older than 45) still have a predilection to invest in young teams. If they are older, are they still qualified to judge? Are they current enough to understand? Is it he who has the gold? Out of six in the last year, the last four startups we provided consulting services to had founders older than 40. The largest seed round went to the oldest team in terms of age. The investment came from a private investor who is a known VC. The two founders were both nearing 60. What did they have? A winning concept and a winning attitude. What's more, they had contacts and reach. A compromise: Perhaps if VCs have some concerns in this area, they can hedge their bets by suggesting newer members to join the founding team. Usually the founders just want to launch and realize their potential.
    I am a 50-year old startup consultant. My partner is my age. I hope what we at 3 Big Heads has to offer is currency in terms of technology and markets seasoned with understanding and experience. We don't find that young founders have a problem with our “advanced” age. They just want our brains!

    • sethlevine

      you point out another flaw in the article. i think their assumption that many venture backed companies are founded by younger teams isn’t correct. one look at our own portfolio should confirm that.  thanks for pointing this out.