Would-be entrepreneurs of all ages come to me for advice about whether they should start a business and what it takes to succeed. They range from the students in my entrepreneurship classes at Princeton, through men and women at midlife looking for a change, to soon-to-be retirees who aren’t yet ready for nonstop golf. They make for quite a study in contrasts: the young brimming with self-confidence, energy and sometimes naiveté; the older adults projecting experience, prudence, and sometimes self-doubt about their ability to keep up with the twenty-somethings they read about in the business press.
The young often need a strong dose of realism: The Silicon Valley model of explosive growth fueled by venture capital applies to less than 1% of entrepreneurs; brilliant ideas count for less than the ability to make customers happy enough to part with their money, and a willingness to take big risks often leads to disaster.
Older would-be first-timers need a dose of realism, too, but of a different kind. They are less likely to be mistaken about external factors like financing, customer expectations and risk-taking than they are about themselves—failing to see the many advantages they bring to entrepreneurship. If you’re an older adult contemplating entrepreneurship, take heart. You likely enjoy some or all of the following advantages:
You outnumber the young.First-time entrepreneurship is by no means largely a young person’s game. According to the most recent Kauffman Index of Entrepreneurship, a series of annual reports that measures U.S. entrepreneurship across national, state and metro levels, the proportion of new entrepreneurs over 45 is about 51% versus 48% for those under 45. Moreover, the share of entrepreneurs age 55 to 64 has increased from 15% of new entrepreneurs in 1996 to 26% in 2016 (the latest year for which figures are available). Meanwhile, the share of new entrepreneurs age 20 to 34 has decreased from 34% in 1996 to 24% in 2016.
You know your way around money. If you have been a business executive, as many of my older advisees are (including some former CEOs), you likely understand capital structure, financing and allocation of resources. But even if your financial experience extends no farther than taking out a mortgage or managing family finances, you are ahead of many younger people.
By Contributor to Former, 3/5/2019