Boomers displace 20-somethings
as entrepreneurial founders
of technology companies
It’s not your father’s startup anymore—Oh, wait, it is!
The Business Review (Albany) - by Pam Allen
Ashook Sood started his first company at age 54. Seven years later, about the same time many of his former colleagues at Honeywell, Lockheed Martin and Tyco were preparing to retire, he founded his second startup.
Sood could retire comfortably today and spend more time with his family, but that plan isn’t in the cards.
“Things are falling into place. We’re just getting started,” said Sood, CEO of Magnolia Solar Inc., a company that develops nanostructured thin-film solar cells. The company in March moved to Albany from Woburn, Mass.
Sood, 62, is among the growing number of individuals who are forming early-stage businesses later in life.
Forget the twentysomethings who dominated the dot-com era in the late 1990s: Today, most company founders are between the ages of 55 and 64.
The 20-34 age bracket—once the hottest group for founding early-stage technology companies—has the lowest startup rate, according to a recent study by the Kauffman Foundation, a private organization that tracks entrepreneurship.
The number of people ages 55-64 who started businesses increased 36 percent in 2008. In all, more than 80 percent of all startups were by people over 40 years of age.
There are a number of reasons for the rise in middle-aged entrepreneurship.
First, recessions such as this one squeeze out higher-wage earners, who typically are the older, more experienced workers. Those individuals tend to have more savings and better access to funds than their younger counterparts, said Peter Pritchard, program director of venture programs for Albany’s Center for Economic Growth.
“Older individuals might have a better credit history, or they might have money put away,” Pritchard said.
Diminished retirement portfolios have also changed the game. For years, experts worried that baby boomers would tax the country’s health system and other resources once that large bubble of workers exited the work force. Instead, the American Association of Retired Persons has reported that 80 percent of baby boomers plan to work in retirement.
“The United States might be on the cusp of an entrepreneurship boom—not in spite of an aging population but because of it,” said Dane Stangler, the senior analyst who wrote the Kauffman study.