There's a major paradox in entrepreneurship that few people talk about. Yet it affects almost everybody.
I'm talking about the tradeoff between timing and experience.
From a risk perspective, the best time to start your own company is when you’re young and have nothing to lose. (Just go for it!?)
The trouble is, when you're starting out, you don't know a whole lot... so, you're more likely to fail.
Later, when you feel you've gathered enough expertise to become an entrepreneur, you’re already deep into your career, and life.
By then, potentially, you have a lot more to lose... maybe a spouse, children, a mortgage, health insurance, life insurance, perhaps school fees... These are all costs and responsibilities that potentially hold back older founders from taking the leap into entrepreneurship.
The truth is, in most cases, the later you leave it, the less you can afford a mistake. This means that more experienced, and often therefore more investable, founders are typically less likely to get started.
Many never make the jump, and wisely so.
Credit where it's due
Much attention and admiration goes to younger founders - usually well-deserved, no doubt. But it shouldn't be forgotten that those younger people can afford to get it wrong.
They have time to bounce back.
Meanwhile it's generally the older entrepreneurs who take a bigger risk, because they need to get it right first time.
Unless you "fail fast", every startup you found can devour a decade of your life. If that doesn't end in a successful exit, it's probably going to take you a while to bounce back (I failed, and it took me at least 18 months before I could even contemplate the idea of another startup). So let's call it 12 years.
If you launch a startup when you're 40 and it doesn't work out, are you really prepared to launch another at 52, with a possible exit not coming until you're in your 60s?
Perhaps more importantly, are you and your family prepared to make all the sacrifices that most founders have to make (low salary, long working hours, high levels of uncertainty and stress, etc.) all that time?
It's not unrealistic to assume that many are not.
This is why we launched DQventures.
Around 2020, Oliver, Arjun and I began to notice something. As our friends and peers reached their 40s and 50s, many told us they couldn't face another 20 years of corporate life. Instead they wanted to launch a startup.
Based on everything I've said above, we spent several months telling them:
(DQ stands for don't quit.)
After a while, we realised something. These were the very people we should be backing. As angel investors, we were making much better returns from older, more experienced founders than we were from younger ones.
But instead of writing cheques, we could be much more valuable to these "wantapreneurs" if we became their cofounders.
That way, we could help them de-risk the crucial first 6-to-12 months of their new companies. We could help them do the grunt work of validating their concept and getting a "minimum viable business" up and running (work to which, in most cases, they weren't perfectly suited anyway!). Meanwhile, they could remain employed in their jobs, continue earning their salaries, and avoid making any hasty, life-altering decisions.
It's worked well. To date, we've helped 13 senior professionals make the transition into entrepreneurship. Our next milestone is to reach 100 flourishing businesses.
If you know someone like this, please feel free to point them in our direction. We're always happy to listen. The best place to start is to read about how DQventures works. If that sounds like what they're looking for, they can submit their idea to us directly using our application form here.
– Image from Pexels.