‘I just lost the fear’: why more older people are founding start-ups

Experienced founders finding success despite the prejudices of investors.

Bernie Marcus launched Home Depot when he was 50. Donald Fisher had recently celebrated his 41st birthday when he co-founded Gap with his 38-year-old wife. And though Steve Jobs was 21 when he unveiled Apple’s earliest technology, it was not until his fifties that he launched the iPhone, transforming the company into one of the world’s most valuable.

When it comes to creating successful businesses, it pays to have a few grey hairs. And, in the past decade, the trend for older people to create and run thriving ventures has accelerated.

Since 2020, the percentage of businesses founded by people aged 55 to 64 has increased in the US, the UK, France and Germany, according to the Global Entrepreneurship Monitor, an annual measure of start-up activity. Founders aged 45-plus now account for between a quarter and a third of all new entrepreneurial activity.

“The rise in the number of older entrepreneurs is about the growth in the asset rich in this age group,” says Mark Hart, deputy director of the Enterprise Research Centre at Aston University and GEM report author.

He sees “no lack of aspiration” among older founders. Many have already enjoyed successful careers, with experience in areas such as fundraising, and have enough contacts to source seed backers and hire dynamic founding teams.

When Kay Miller quit her job as a primary school headteacher at 57 to build the Den Kit Company, selling outdoor activity sets for children, she drew on decades of experience seeing her own pupils benefit from outside play.

Years of leadership gave her confidence to take the plunge after starting the company as a side hustle with a friend. “We’d been teachers and mothers and that life experience fortified our passion and our knowledge,” she says.

It also helped in times of adversity. Den Kit has grown to a company with revenue of £1mn and is stocked by big retailers. But it has battled rising raw materials costs, and sales have fallen as inflation has squeezed consumer spending. After the pandemic, two directors left and the workforce of 14 was more than halved.

“We have fumbled through with pure determination,” Miller says. The business was, and remains, profitable. “It is that backing yourself, probably because you have... been in difficult situations before.”

Older founders do face some additional obstacles. Insiders say a prevailing mood among venture capitalists, particularly in tech, is that entrepreneurship ability peaks in a person’s thirties. “There’s this idea that young people are just more likely to have more valuable ideas,” Benjamin Jones, strategy professor at Northwestern University’s Kellogg School of Management, says.

Yet older people continue to defy stereotypes — more so since the Covid-19 pandemic overturned working patterns and increased financial pressures on some. “Making people work from home for long periods left many wondering whether they might as well set up in business,” says Hart.

Husband and wife Ricardo and Marina Larroudé founded their eponymous New York-based shoe brand aged 42 and 41 respectively, after being laid off from their jobs in finance and fashion in early 2020.

Having emigrated to the US from Brazil, they were stuck inside with two young children and a long way from home. What they did have, however, were thick contacts books to source backers and customers.

By May 2020 they had decided to launch Larroudé. By June they had their first set of samples for potential buyers.

“I was lucky enough to have had several dream jobs, but I had also dreamt of producing my own style line since before getting my first job in fashion,” says Marina, who had moved from market editor at Vogue Brazil to roles at Condé Nast, Barneys and Teen Vogue in New York.

Ricardo, who had been an analyst at Lehman Brothers and held senior roles at Apollo Global Management and Anheuser-Busch InBev, says he would have liked to have started a business earlier. But his experience in investment and as a chief financial officer proved indispensable to the new venture. Without it, he says, the pair may not have made vital business decisions — such as asking customers online to pay ahead of orders being commissioned, rather than looking only to investors for capital.

“We got friends and family to stump up about US$700,000, but that would not have been enough to get to where we are now,” he says. “Being a bit more mature, we just had to figure that out. If we were younger, we might have gone out to raise several million from investors and then regretted it.”

According to GEM, Britain has recorded the biggest jump in older founders since the pandemic, with the percentage of businesses started by those aged 45 to 64 increasing from 25.4 per cent in 2020 to 33.3 per cent last year.

The average age of directors in British tech start-ups is now 40, according to private company data provider Beauhurst.

However, Sherry Coutu, a 59-year-old entrepreneur and angel investor based in the UK tech hub of Cambridge, believes there is a problem in the British venture capital community.

“There is a preponderance of subscale VC funds that employ twenty-somethings and think about twenty-something founders,” she says. “I don’t think you find that in the angel investor community but I think that is a potential bias in the system.”

Eileen Burbidge, partner of early-stage technology fund Passion Capital, says investors believe younger people are more willing to take lower salaries until a venture is profitable, and better able to handle failures because they have less to lose.

“Conventional wisdom would say that once someone has responsibilities such as a mortgage, partner or children, they might be less likely to take a leap of faith,” Burbidge, 52, says.

The complications of mid-life have proved challenging for Laura Harnett, who founded cleaning brand Seep when she was 42, after a 20-year career in consulting and senior executive roles at the department store chain Selfridges.

Three years later, the company generates an annual £1mn in revenue, employs five people and is stocked by outlets including Wholefoods and Amazon. But Hartnett admits she struggles to juggle family responsibilities with building the business and looking after herself.

“In your twenties, you often don’t have anyone else but yourself. My priorities are my business and kids first. That means I come a fairly low third and husband fourth.”

She gets support from LinkedIn, where she is followed by peers of the same age who observe the highs and lows of start-up life from a distance.

“They would say I am very brave. They live vicariously through me,” Hartnett says. “It is much easier to take the risk in your twenties or thirties. I have a few friends who would like to do it, but the reality is that they can’t.”

While older founders have more to lose, there is some evidence their risk is more likely to pay off.

According to the 2018 NBER study, a 50-year-old entrepreneur was almost twice as likely to have a runaway success as a 30-year-old. Experience working in an industry was one of the best indicators of whether a person would create a high-growth business, it found.

“People conflate the fact that someone has a successful idea and they are young,” says Jones, a co-author of the report. “Some people are just good at entrepreneurship, even when they are young. What we found was that they also get better with age.”

And while the challenges of age could be tough for Hartnett, her experiences helped her to take the plunge.

She felt she was “becoming a dinosaur” in her senior role at Selfridges. Her husband qualified as a surgeon, so she was no longer the family’s main breadwinner. And a breast cancer scare gave her a fresh perspective on life and its possibilities.

“I just lost the fear,” she says.

Written by: Jonathan Moules

© Financial Times