Business Technology

Monday 18 February 2019

Investors see start-up future in the middle-aged

The middle-aged market is attracting investor interest.
The middle-aged market is attracting investor interest.
Adrian Weckler

Adrian Weckler

Middle-aged? Worried that you've missed out on life's chance at creating a hot tech start-up? If so, you're badly mistaken. An increasing number of the most lauded Irish tech start-ups are being set up by people in their 30s, 40s and 50s.

Forget about ivy-league college dropouts or teenage maths geniuses: the evidence points to a maturing industry with older entrepreneurs building highly successful technology enterprises from scratch.

"One of the interesting things we're starting to see here is the emergence now of repeat entrepreneurs," said John Flynn, managing director of one of Ireland's most successful technology focused venture capital firms, ACT. "That's a really good sign."

In Ireland, several of the most prominent technology startups winning multi-million euro backing over the last 12 months have founders and senior executives removed from their 20s or 30s. These include security firm Trustev (€2m), online news verification startup Storyful (€17m) and virtual greeting card company Cleverbug (€4.4m).

Waterford-based software firm Feedhenry, founded and managed by non-20-somethings, is also instructive. It makes 'cloud mobile application platforms' for big companies. Because of the solid, sober business sense underpinning the technology, it raised €7m last year from backers that included such senior players as Intel Capital.

With a workforce of almost 70 people now, Feedhenry is currently signing multi-million euro contracts with big companies anxious to get into the mobile cloud. It may also be on the verge of a big-money acquisition by a multi-national software firm.

None of Feedhenry's founders or senior executives (Barry Downes, Cathal McGloin and Micheal O'Foghlu) are youngsters. Experience, nous and expertise are their killer tools.

These skills have proven to be a far more attractive commercial proposition as a start-up founder than raw youth.

Highly successful, commercially savvy start-up veterans have changed the way smart investors view the technology landscape. Perennial winners such as Annrai O'Toole, the former Iona and Cape Clear founder who has gone on to make the European arm of US multi-national software firm Workday a huge success in Dublin, have created a template for what many investors are now seeking.

"Sometimes there's a mistaken belief that the next billion-dollar company is only really coming from a spotty teenager," said Claire Lee, managing director of the corporate venture relationship group at Silicon Valley Bank, one of the most active financiers in the US technology industry.

"But for every one of those, there are 50 guys a lot older who are building real companies and products worth their salt."

Even technology accelerator organisations, known more for college-age candidates than mature business people, are seeing an older profile of entrepreneur.

Techstars, arguably Europe's most prestigious accelerator, now has an average graduate age of 36. The London-based organisation, which has seen 292 companies pass through its doors, claims that graduate companies achieve an average funding round of €1.5m based in London.

And it's not because its board is stuffed with accountants and MBA adjudicators. The organisation's mentors include Twitter chief executive Dick Costolo and Union Square Ventures partner Fred Wilson.

There's some evidence that the same trend is happening in Irish incubator and accelerator funds.

Last week, Telefonica's acclaimed Wayra Academy accelerator in Dublin revealed its latest list of nine start-ups accepted into its nine-month, €40,000-per-start-up scheme. Few of the start-up founders are college kids.

"There's a lot of enterprise, business-to-business stuff that is getting built and funded," said Silicon Valley Bank's Claire Lee. "It doesn't matter that it's unsexy. It's more likely to be credible."

It is this 'unsexy" sector that is attracting many older entrepreneurs back into start-up land.

Rob Leslie is a veteran of the corporate world, having worked for Dell in Japan and a number of other companies.

His latest venture, Sedicii, is a start-up targeting security authentication between users and servers.

"We're not claiming to solve world hunger," he said. "We're just saying we'll mitigate risk for big companies."

Leslie is also a co-founder of another start-up, Global Business Register, which aims to provide quick results for anyone searching for company information across different countries.

In any business, age, of course, shouldn't matter. If an idea or a technology is a good one, that is what should attract investor interest.

But technology start-ups still attract a stereotype of being something for the young, with 18-hour days, seat-of-the-pants navigation and a plucky grin.

But all the evidence points to that fact that when it comes to creating a successful startup, age really is just a number.

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