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DiggA recent story in Portfolio profiles 19-year-old Jared Kim, who's in line to receive $500,000 in funding for his Web 2.0 startup. Meanwhile, I recently met 16-year-old Cory Levy of Houston, who is spending his Bar-Mitzvah money hiring programmers to build a Web 2.0 startup.
What does such precocity suggest -- that young people are becoming increasingly entrepreneurial or that the funding environment for Internet companies is a little wacky? I suspect it's a little of the former and a whole lot of the latter. Fine, it's never been easier or cheaper to start a consumer Internet business. But a growing number of investors seem to be throwing money at an idea, and greenhorn entrepreneurs, just to see if it sticks. And I'm not talking about building a startup into a public company, since success these days prioritizes simply selling the budding business.
I'm all for young people starting companies. Michael Dell famously started his PC company from a college dorm room. And unlike during the dot-com craze, a lot of these investments are extremely modest. But let's be clear here -- many young entrepreneurs are merely ornamenting existing technology, not inventing new products, let alone forging viable businesses. It usually takes a fair amount of real-world experience to create a company built for the long-haul. As skeptical as we should be of claims that -- to cite that hackneyed phrase -- a technology is revolutionary rather than evolutionary, that's still a useful standard to distinguish a potentially important new business from a bit of icing on the Web 2.0 cake. - Stacey Higginbotham
See Dec. 2007 story from Portfolio
- Video: Chris Coyne on 'red shoes for the rest of us' and investing beyond the bottom line
- CA provides exit for Benchmark
- 2008 breaks 31-year record for VC-backed IPOs
- Q&A: "We have always been way too arrogant," says RRE's Jim Robinson on VCs
- Video Flashback 2008: Union Square's Fred Wilson on low burn rates
at 29, I'm already an old-trepreneur, I think what VCs and angels are looking for is the person with the drive to do something, anything...
after all, the more remote the chances always the greater the returns when it does stick --
what's more remote than freckled geeks living on pocket money without any business experience whatsoever...
I have heard from a high ranking News Corp insider that the next News Corp purchase my be UrTone. They say it’s going to be bigger that Jamba, it is a wireless platform with custom ring tone technology never seen before and a patent app that ‘if granted’ will cause Apple’s iTunes ring tone offering a BIG problem, it will also offer the social networking to mobile phone technology, ads to mobile and already has deals with Warner Music and Universal. It’s next to be snapped up before it is well known and the price is hiked.
You say that "it usually takes a fair amount of real-world experience to create a company built for the long-haul."....while this is true, are these young people wasting their time and money...OR are they laying the ground work for their future by starting early to get real world experience?
I went to junior high with a guy who has become a successful entrepreneur (He is now 41 and has taken a company public, currently working on his 5th start-up, etc...). He started his first business when the rest of us were thinking about cars, beers and girls. By starting as a teen I think these kids are ahead of the game.
If I had my life to do over again I would be one of these young risk takers. Win or lose with the early business, they are set up to have a better chance at a BIG win later on.
You guys are right. It’s great that young people are making the leap to start companies, and that they can find financial backing for it. I just hope to see more entrepreneurs--at any age--still trying to change the world rather than coming up with just another ad-supported widget or a social network for apartment dwellers, book lovers or people leasing their cars.
Yes well, Angels and VCs are just regular people... Most of them have trouble really seeing the future clearly. So when an 18 year old shows them something cool that seems to be in the right space, they're basically betting on the off chance that it will evolve into something that has exit value in a rapidly exploding space.
Its a rare VC who has a crystal clear vision of the future.