You might wonder why young people like you or those close to you are not taken seriously and probably laughed at when they say they want to build a startup. Well, let’s say that nowadays entrepreneurship has become “cool” because of Mark Zuckerberg or Elon Musk’s successes but mainly because it is a fast way to become a celebrity. Although currently, the success rate is around 10% (Bryant, 2020), which is where part of the skepticism comes from together with age-related reasons.
That said, taking the “just talkers” aside, young entrepreneurs can really make an impact bringing ideas that don’t necessarily are feasible today but can be in the near future or even being more accurate in executing services targeting their age group. Also, even though they might not have full knowledge of what they are trying to build, neither do some 30-year-olds or even seniors. It all depends on your will in making something, so age and country of origin should not interfere with this.
Some of the reasons why under-30 entrepreneurs are not taken seriously by investors are:
Lack of Experience drives many investors and partners away since this means that most situations will be new to you, so you don’t have previous experience to deal with them in the right way.
Education is key in not just giving you the experience you lack, but unfortunately, it also gives you credibility which creates trust. This means that for example, someone with a higher GPA than you may have a higher chance to be trusted by investors, which should not be the case, but it is still is in close-minded societies. Therefore you must show them the work you have so far, either an MVP (Minimal Viable Product) or any of your mockups, in order to build trust.
Creating a startup during your studies or work, as a side-hustle means working part-time. These words scare investors away because it means you are not putting all your effort into making it successful and basically that you will work 50% for each dollar they invest. So, you must either really convince them you can deliver the same work in half of the time, that you have a killer product or that you have a team working full-time.
That said, 43.93 percent of all VC investments in tech startups in the US, comes from Silicon Valley (Florida, 2017). But when we talk about the global scene, the US has decreased its almost full-ownership of the VC investments to currently having 50 percent of it (Florida, & Hathaway, n.d.). This shows how other countries like China, especially in Shenzhen, but also India, and Europe are becoming key players. Therefore the barriers to entry are decreasing for anyone around the world to start a tech startup. Although, at the same time competition is skyrocketing and the fight for funding is as well, which means that only those founders located or seeking funding in startup hubs like Silicon Valley, Shenzhen, London, and Bangalore are the most likely to succeed. So even though the location is not a problem anymore, it is much easier when you or your startup are located in one of the mentioned hubs.
As a young entrepreneur or an aspiring one, you must have in mind first impressions have a huge impact in building trust, which is essential in business, but even more when it comes to dealing with high-experienced people. Therefore, you must act strategically when asking for funding or looking for partners and buyers. This means you might have to show them projects you have worked on in the past and any other relevant experience you have. Also, know your business perfectly, learn some facts about your industry and be aware of whatever is happening today, since that shows your interest in not just your product/ service but in being able to pivot if necessary. Having that in mind, knowing how to sell yourself and your business is the most important thing.
To conclude, young aspiring entrepreneurs ranging the ages of 18 - 30, don’t have an easy path, mainly because of their age and how this is seen in close-minded places. This is when young founders have to think strategically and move or seek funding in startup hubs such as Silicon Valley, Shenzhen, London, and Bangalore, and make VCs believe they are talking to a 40-year-old, by providing them everything they would expect and more.
References:
Bryant, S. (2020, November 09). How Many Startups Fail and Why? Retrieved from https://www.investopedia.com/articles/personal-finance/040915/how-many-startups-fail-and-why.asp#:~:text=In%202019%2C%20the%20failure%20rate,70%25%20in%20their%2010th%20year.
Florida, R. (2017, October 3). Venture Capital Remains Highly Concentrated in Just a Few Cities. Retrieved from https://www.bloomberg.com/news/articles/2017-10-03/the-geographic-concentration-of-venture-capital
Florida, R., & Hathaway, I. (n.d.). Rise of the Global Startup City. Retrieved January 13, 2021, from http://www.startupsusa.org/global-startup-cities/