Vivek Wadhwa for TechCrunch:
I have a few theories about why VC’s favor the young. First, VC’s tend to travel in herds. For the last decade, the herd has been all about the Internet. And Internet startups require a lot less sophistication and coordination than, say, a telecom gear startup, an enterprise software startup, or a biotech startup. Everything from the product development processes to sales processes are far more complex for these types of products. I also think that in its Web 2.0 infatuation, Silicon Valley has probably funded a huge number of companies that are really features and not companies.
Mr. Wadhwa goes on to say young CEOs might be easier to push around come term sheet time, and that they “don’t like the hassles of running big companies so they’ll let VC’s bring in adult management.”
There are certainly a lot of startups, particularly in the internet space, founded by 20-somethings. Many seem quite creative, but it’s worth defining creativity to start with. Is it simply coming up with a novel web-based service that hoards of people will join as long as it’s free? Or being able to identify a problem, often based on analysis of a lot of disparate conditions, and then assembling an answer. Seems to me there are a lot more potential customers willing to pay for the latter.
I look around and see good things happening, although some of them (maybe many of them) seem to be solutions looking for a problem. Nevertheless, I like this debate.
Editor’s note: I’m an “old guy.”