When Ross Walker, 73, joined a floundering technology startup as CEO three years ago, the business desperately needed investment.
The company, Oxford Multi Spectral, had been struggling since its inception, but Walker believed its scanning technology that detects forgery within documents — originally developed for use by academics working with ancient papyri and manuscripts in Oxford University’s classics department — could have wide commercial appeal.
However, three months of pitching to U.K.-based private equity firms that offer financing to emerging domestic companies proved fruitless. “I’d go to a venture capital outfit and say I had this nice new technology startup, and they’d look at me as though I’d crawled out from underneath a stone,” said Walker. He said Chinese investers, however, treated him differently.
In the past 12 months, Walker has raised just over £1 million (about $1.2 million) for two tech startups. His initial efforts to sell Oxford Multi Spectral in China raised £700,000 from U.K.-based RTC Innovation, which connects Chinese investors to young British companies.
The same team then asked him to lead another startup out of Birmingham University that focused on innovative 3-D scanning software. The new business’ £300,000 investment came from investors in Chengdu, in southwestern China’s Sichuan province.
“When I meet Chinese investors, I have no problem relating to them. They nod at me wisely; I can feel their empathy. My hair color isn’t a problem. In fact, I feel respected,” said Walker, who has run eight businesses in his 50-year career.
According to a report released by HSBC Private Bank in 2015, 60 percent of Chinese entrepreneurs are over 35 years old, which is similar to the demographic leading entrepreneurial initiatives in the U.K. Yet Walker says his profile doesn’t fit the image that investors expect to see from a tech entrepreneur.
William Bao Bean, a partner at Shanghai-based venture capital fund SOSV and the managing director of Chinaccelerator, noted that Chinese investors may be less concerned with age, as their investment priorities are different from those of their Western counterparts. “Chinese investors are looking to buy technology their teams can implement themselves,” he said. “They’re shopping for tech solutions. The age of the CEO doesn’t matter.”
In the U.K. and similar markets, Bao Bean explained, venture capital firms expect the inventors to roll out the technology themselves, whereas Chinese backers expect to buy the technology and sell it without support. “The investment comes down to what the company does, generally not the age of the person behind it,” he said, adding that Walker’s success might have more to do with the fact that forged documents are a huge problem in China, so there’s high demand for the product.
Shanghai-based entrepreneur Lin Zhiqing, 50, said she had little difficulty raising $5 million in venture capital funds for her solar energy startup, Yaoling Tech (Shanghai) Co. Ltd. Lin thinks that 20-something founders have fallen slightly out of favor with investors in China in recent years. “The post-’90s entrepreneurs rose to fame fast, but then failed soon after,” she said. “That’s probably why venture capital money is coming to me despite my age.”
Earlier this year, 17-year-old Wang Kaixin shot to fame after successfully marketing her online department store startup on a reality TV show on which young entrepreneurs pitch their business ideas to investors. However, in October it was reported that the website that initially raised 20 million yuan (almost $3 million) was no longer active, and that staff had been laid off and funds misused.
Lin added that in general, she feels Chinese and foreign investors are similar in the kinds of high-growth, tech-orientated industries they invest in. “Chinese investors travel frequently to America and Europe. They are experienced enough to make prudent and smart choices,” she said.
The potential for success among older entrepreneurs was widely discussed in 2009, after a research team lead by Vivek Wadhwa at Duke University found that the average age of a successful entrepreneur in high-growth industries such as computer technology, health care, and aerospace was 40. The study also showed that twice as many successful entrepreneurs are over 50 as under 25, and twice as many are over 60 as under 20.
In 2014, the Global Entrepreneurship Monitor U.K. published a report highlighting a record increase in the numbers of over-50s starting businesses. And according to research by the Kauffman Foundation, nearly 70 percent of entrepreneurs are married when they establish companies.
Yet according to the British technology journalist and author Ben Hammersley, the cliche of the single, 20-something, tech-savvy, workaholic entrepreneur still persists among venture capitalists looking for the next big thing. “There is certainly a global issue with [venture capital] being given to younger people with hoodies and enthusiasm, rather than older people with industry experience,” he said.
Hammersley points out that this attitude is based on the assumption that young people are more likely to understand the digital landscape and be willing to work the 18-hour days a tech venture capitalist requires. “There’s a certain cargo-cult fetishization of the young in the digital world, in the hope the person you are funding will be the next Zuckerberg,” he said, referring to the founder and CEO of Facebook. “It’s tied up with the cultural assumptions around age and coolness, against, perhaps, the more Chinese values of age as a mark of respect.”
Additional reporting by Lu Hongyong.
(Header image: UIG-RF/VCG)