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Silicon Valley: the rise of the adolescent CEOs

Sarah McBride (via SMH) | Feb. 22, 2012
CEO of a gaming start-up, Josh Buckley, 20, is looking forward to March's Game Developers Conference. There's one problem: he may be turned away from parties because he's not old enough to drink.

"If I'm going to write that big a cheque, I'm going to invest in people who've done it before," he said. "But if you look at it as, 'Hey, I'm going to raise $US500,000,' there's a lot of ways to raise that."

Kraus helped back Airy Labs, an educational social-gaming company run by 20-year-old Andrew Hsu that raised $US1.5 million. Hsu is now learning the same hard lessons as many of his elders: the company recently laid off staff and is looking to rent out some of its office space in Palo Alto, California. Hsu said the company is taking a different direction and focusing on a line of new products in math, language arts and science.

Kraus said his biggest hiccups with young entrepreneurs are the business references they don't understand because they are too young to be aware of them.

Andreessen says more than one young entrepreneur has asked him: "What did Netscape do again?" Andreessen co-founded Netscape, which developed the first commercial web browser and helped launch the internet era, shortly after graduating from college in 1993.

"I was 9 years old" during the first internet boom, says Brian Wong, 20, who runs reward-network Kiip. He has had his fill of stories about companies that tanked amid the dot-com bust of 2000. The first time he heard the name Webvan, a legendary dot-com failure, "I had to look it up," he recalled.

Wong has raised more than $US4 million from Hummer Winblad Venture Partners and others.

He believes his age helps him and other youthful entrepreneurs. "You're expected to be limitless," he said. "Kind of destructive."

While the freewheeling ways of youth may be a positive for venture capitalists, they are less appreciated by landlords. Tim Chae, the 20-year-old chief executive and co-founder of social-media marketing company PostRocket, said his age and lack of credit created problems when he moved to San Francisco last year and needed an apartment. Finally, his father had to drive the 141 kilometres from Sacramento to co-sign a lease.

Chae, a Babson College dropout, now lives in nearby Mountain View, California and attends 500 Startups, a crash course for young companies run by a venture firm of the same name. He has raised a small amount of capital and hopes the upcoming Facebook IPO will help investors look more kindly on young entrepreneurs. "Thank God for Zuckerberg", he says.

Zuckerberg, who left Harvard after two years, is helping recast the notion of dropping out of college. Peter Thiel, an early investor in Facebook and a co-founder of PayPal, is encouraging others to try that path through two-year fellowships for students who take a break from school, move to San Francisco and pursue their entrepreneurial aspirations.

 

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