Unlikely Entrepreneurs

CHAPTER 7Endings and Beginnings

7.1 Age and High-Growth Entrepreneurship

Entrepreneurship is often associated with youth, a notion strengthened by the wild success of super founders like Bill Gates who was 20 years old when he co-founded Microsoft, and Mark Zuckerberg who launched Facebook from his Harvard dorm room at the age of 19 before dropping out. But is this really the norm in the tech sector and beyond?

No, according to a research paper co-authored by MIT Sloan Professor Pierre Azoulay. In “Age and High-Growth Entrepreneurship,”¹ published in the journal American Economics Review: Insights, he and a team of co-researchers studied start-ups systematically in the United States, integrating administrative data on firms, workers, and owners, and found that the average age of entrepreneurs at the time they founded their companies was 42, with the vast majority running small businesses. In software start-ups, a field most often associated with young founders, the average age was 40. The age range rose even higher in industries like oil and gas or biotechnology, hovering around 47.

But what about the most successful start-ups? Professor Azoulay and his co-authors dug deep into the data and found that among the top 0.1% of start-ups based on growth in their first five years, the founders started their companies, on average, at 45 years old.²

Their findings point to older entrepreneurs having more access to greater human capital, social capital, or financial capital. That, and ...