What Do Venture Capitalists Think About Young Entrepreneurs?

Q: With a number of great companies being born of ideas coming from a youthful group of entrepreneurs, how are investors reacting to twenty-somethings fresh out of college, with little to no professional experience, without a strong network of seasoned industry experience and with a inconceivable amount of life learning still ahead of them?

Assuming all else is favorable in an investors eyes, what are investors weary of and how can young entrepreneurs prepare for this? In addition, what advice to you have for the young person seeking to build a team of "time-tested, battle-hardened" professionals?

A: (Jason)  We think young-entrepreneurs are great.  In fact, we like spending time with the younger set so much that we are active mentors and investors with Techstars.  And certainly with our fund, we wouldn’t hesitate to fund a first-time entrepreneur with a great idea. 

I think the key to being a young entrepreneur is being self aware.  Know what you know and also know what you don’t.  If you can communicate to a prospective investor that you are smart, have a great idea AND are emotionally intelligent and realize what other skills sets you’ll need to surround yourself with, then I don’t think being young and / or inexperienced will hurt your chances.  In fact, youthful exuberance is infectious and sometimes younger folks will think outside the box more often than older ones who are set in their ways. 

What we are weary about would be the young / first-time team that thinks they "know everything."  I’ve seen this from time-to-time and it’s an immediate turnoff.  One can still be confident and driven and self aware.  No good and experienced VC would expect a twenty-year old to know everything and be prepared for anything that can happen in a startup company, so don’t pretend that you do.  Even after all of our years, we still haven’t seen "everything."

The key is putting a good team around you, or asking your funding partner for help and advice in building a team.  Make sure that you have this discussion BEFORE you commit to an investor, as you don’t want an after-investment surprise.

Most VCs have great networks of executives and can help place particular skill sets into their companies.  Otherwise, you can put together a team before taking on funding and to attract the "veteran" players, you’ll have to have a compelling idea and a mature set of twenty-somethings (in your case).

Good luck to you.   

  • Great comments. Looking at my client base, I would say that knowing what you don't know is a good indicator of eventual success. The reverse is also true.

  • I recently asked a question that relates to this…

    “And certainly with our fund, we wouldn't hesitate to fund a first-time entrepreneur with a great idea.”

    Do they need more than an idea? What if they have a plan and roadmap laid out, and a new transformative idea, but not necessarily a beta? In my case the site would be outsourced to a company. Are ideas, and obviously the person themselves, enough to go on for the investment?

  • Personally I have seen more of a kind of a reverse ageism — young first-time entrepreneurs get to get funded more easily than first-time entrepreneurs with a lot of experience in their respective fields.

  • Great answer Jason! Sometimes starting a company at a younger age enhances the humble effect promoting efficiency within the organization.

  • Lee

    Communication is very important. Both with your team and with your investor(s). A great idea is one that can be easily conveyed and easily understood by your team, investors and the end user(s).

  • Speaking as a young 20s entrepreneur, I think the passion that I exude for our project is infectious. Since graduating from school, I have noticed my demeanor change, but when it comes to pitching my current startup ( ” target=”_blank”>http://www.gorankem.com), I don't know if I could ever be more excited about what we have in the works right now. It's my 2nd startup, but after 19 months of development, I am so confident with our product that you cannot not notice me if you're around (I say this without being able to look back on all too much though)

    As I've heard before, a lot of investors often like to live vicariously through the founders and the entire experience. I wouldn't doubt it one bit. Despite being pennyless at the moment, I could not be much more excited when I wake up every day. We just released our private alpha <1 month ago, and I can't wait for what's to come. Call it irrational exhuberence if you have to...

  • Randall M.

    Yes, Jason that is a great answer. There are some tremendous ideas coming from the college Young Entrepreneurs, just read about a Yale College Entrepreneur who not only has a great biz model, he is helping the environment at the same time! Very cool and super inspiring.

  • Michelle

    Sometimes the more experienced one is, tends to get lost in all the details they got to know from the large experience along the years of practice. A young entrepreneur will spend more time and enthusiasm over the idea itself rather than the means to accomplish a plan or strategy. And this is the good part about youth. Check out the huge investors database from VCgate ( www. vcgate.com ) lots of them are willing to invest in young talents as well. Good luck to all young entrepreneurs and congrats to all those that support their initiative.