Do VCs have an age bias? • Hacker News Board

Re: Do VCs have an age bias?

#21

Post by mathattack » Mon, Jul 07, 2014, 5:02 PM UTC

shacharz wrote: post #20

Is this data normalized by the size of each group somehow? Without normalization this chart shows nothing about the VC's 'absolute' preference. At best it shows how the VC's are compared between themselves, and even that is by assuming all the VC's see the same amount of startups at each age group - which I presume is also far from true.

I also would like to see some kind of normalization about the rounds they invest in.

Re: Do VCs have an age bias?

#22

Post by bennstancil » Mon, Jul 07, 2014, 5:09 PM UTC

(I made the graphic) - Unfortunately, there's obviously no data on the pitches that VCs see. There could be ways to halfway infer it - for instance, founder age tends to be different by industry (https://modeanalytics.com/benn/reports/a43fb710b2ef). If you look at how one VC's investments in one industry differs from overall investments in that industry, you might be able to somewhat control for the different pitches VCs see. But without more complete data, drawing any conclusions beyond things like "YC founders are young" is tough.

On a related note, here's something else I wrote that looks into whether or not older founders perform better: http://blog.modeanalytics.com/are-experienced-founders-bette...

Re: Do VCs have an age bias?

#23

Post by bennstancil » Mon, Jul 07, 2014, 5:18 PM UTC

mathattack wrote: post #21

shacharz wrote: post #20

Is this data normalized by the size of each group somehow? Without normalization this chart shows nothing about the VC's 'absolute' preference. At best it shows how the VC's are compared between themselves, and even that is by assuming all the VC's see the same amount of startups at each age group - which I presume is also far from true.

I also would like to see some kind of normalization about the rounds they invest in.

Filtering by round makes the sample pretty small, but here's the same graphic, only including A rounds.

https://modeanalytics.com/benn/reports/63dde3f90f6c

Re: Do VCs have an age bias?

#24

Post by drakaal » Mon, Jul 07, 2014, 5:38 PM UTC

ulfw wrote: post #17

drakaal wrote: post #3

Very few do. The difference in age of those receiving capital has to do with pitch ratios. When I was 18 I would have pitched for $100K that seemed like a huge sum of money then. That was a years salary back in 1997. Now if you want 25% of what ever I think is the next big thing you had better pony up $5M. Why? Because I could work a 9-5 Make $250k a year and live on $100k paying 2 devs $75k. Find a Partner to do the…

You earn 250K, pay no taxes whatsoever, keep 100K and divide the other 150K equally to two devs (who I assume might not pay taxes either)? Cool

If I invest in to the business as a business expense, I don't have to pay taxes on their income. They have to pay taxes on their income. 75k is less than a good dev should cost, but the advantage of being old and experienced in product management is that you can offshore a great deal more than you can when you are young. $75k will get a you lot of dev in Russia, or Israel.

Re: Do VCs have an age bias?

#25

Post by [deleted] » Mon, Jul 07, 2014, 8:16 PM UTC

serge2k wrote: post #18

ulfw wrote: post #17

Earlier quoted context omitted.

You earn 250K, pay no taxes whatsoever, keep 100K and divide the other 150K equally to two devs (who I assume might not pay taxes either)? Cool

You forgot the part about zero overhead for those 2 devs and the business as a whole.

[deleted]

Re: Do VCs have an age bias?

#26

Post by seanflyon » Mon, Jul 07, 2014, 9:56 PM UTC

drakaal wrote: post #24

ulfw wrote: post #17

Earlier quoted context omitted.

You earn 250K, pay no taxes whatsoever, keep 100K and divide the other 150K equally to two devs (who I assume might not pay taxes either)? Cool

If I invest in to the business as a business expense, I don't have to pay taxes on their income. They have to pay taxes on their income. 75k is less than a good dev should cost, but the advantage of being old and experienced in product management is that you can offshore a great deal more than you can when you are young. $75k will get a you lot of dev in Russia, or Israel.

75k and no benefits

Re: Do VCs have an age bias?

#27

Post by ulfw » Tue, Jul 08, 2014, 6:10 PM UTC

seanflyon wrote: post #26

drakaal wrote: post #24

Earlier quoted context omitted.

If I invest in to the business as a business expense, I don't have to pay taxes on their income. They have to pay taxes on their income. 75k is less than a good dev should cost, but the advantage of being old and experienced in product management is that you can offshore a great deal more than you can when you are young. $75k will get a you lot of dev in Russia, or Israel.

75k and no benefits

The good life...