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Showing posts with label Josh Buckley. Show all posts
Showing posts with label Josh Buckley. Show all posts

Monday 27 February 2012

The rise of the adolescent CEOs

Many of today's young entrepreneurs are not old enough to drink or drive, but nothing is stopping them from making millions with their online ventures.

By Sarah McBride SAN FRANCISCO

Tim Chae poses for a photo in a conference room where he attends '500 Startups,' a crash course for young companies run by a funding firm of the same name, in Mountain View February 16, 2012. Chae, 20, a Babson College dropout, has raised a small amount of capital for his company, Post Rocket, is seeking more and is hoping the upcoming Facebook IPO will help investors look more kindly on all young entrepreneurs. Photo taken February 16, 2012.  REUTERS-Robert Galbraith
Minomonsters Chief Executive Officer (CEO) Josh Buckley, who turns 20 on February 21, poses for a photograph at his company at The Mint in San Francisco February 17, 2012. Buckley sold a previous company for a low six figures when he was still in high school in Maidstone, England, and his current company is backed by big-name venture-capital firms.        REUTERS-Robert Galbraith
Sahil Lavingia, 19, Chief Executive Officer (CEO) of Gumroad, an online payments company he started, sits in front of computers at his home which doubles as his office in the SOMA neighborhood of San Francisco February 17, 2012. Lavingia, who was born in New York and grew up in places like London, Hong Kong and Singapore, dropped out of the University of Southern California to work at online bulletin board company Pinterest. He also developed the Turntable.fm app for the iPhone.  REUTERS-Robert Galbraith
 Sahil Lavingia, 19, chief executive officer (CEO) of Gumroad, an online payments company he started, works in his home which doubles as his office in the SOMA neighborhood of San Francisco February 17, 2012. Lavingia, who was born in New York and grew up in places like London, Hong Kong and Singapore, dropped out of the University of Southern California to work at online bulletin board company Pinterest. He also developed the Turntable.fm app for the iPhone.   REUTERS-Robert Galbraith

(Reuters) - Josh Buckley, chief executive of an online gaming start-up, is looking forward to next month's Game Developers Conference in San Francisco, particularly for the parties and the accompanying schmoozing with industry A-listers.

There's one problem: Buckley, who will turn 20 this week on February 22, may be turned away from many of the parties because he is not old enough to drink. His fake ID was recently confiscated, and the two new ones he ordered from a company in China have not yet arrived.

Such are the dilemmas facing the ever-younger entrepreneurs that Silicon Valley investors are backing these days. While little data on the phenomenon exists, venture capitalists say they are funding more chief executives under age 21 than ever before.



"At a certain point, they can't get much younger or we're going to be invested in preschool," quipped Marc Andreessen, whose venture-capital firm Andreessen Horowitz is one of several that backs Buckley's company, MinoMonsters.

Andreessen and other venture capitalists say the entrepreneurs they fund at 18 or 19 typically have been prepping for years -- learning computer code, taking on ambitious freelance projects and educating themselves on the Internet.

Some are self-consciously molding themselves in the image of Facebook founder Mark Zuckerberg, 27, who created computer games as a child and was taking a graduate-level computer course by his early teens.

Internet businesses that target consumers make a sweet spot for the baby-faced, because online companies often require relatively little capital. A semiconductor start-up might require $10 million to $20 million in the early stages, noted Joe Kraus of Google Ventures, and that would be tough even for the most talented youngster.

"If I'm going to write that big a check, 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 $500,000,' 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 $1.5 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 $4 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 88 miles from Sacramento to co-sign a lease.

Chae, a Babson College dropout, now lives in nearby Mountain View 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.

That's what 17-year-old Laura Deming did when she won a fellowship based on her goal of finding and funding anti-aging technologies and left the Massachusetts Institute of Technology. Because she is not yet 18, she finds herself faxing documents such as non-disclosure agreements to her dad back in Boston to co-sign.

Other young entrepreneurs have trouble negotiating the highways and byways of Silicon Valley quite literally. Sahil Lavingia, 19, recalls a day last summer when he had several meetings scheduled on Sand Hill Road -- home to many of the nation's leading venture-capital firms -- and no car to get there. The journey of just a few miles took hours by the time Lavingia rode a local train a couple of stops, caught a bus to Stanford University and then hopped a shuttle bus to the Stanford Linear Accelerator Center, which is on Sand Hill Road.

Another time, dreading the combination of a hot day and a sweaty walk around Palo Alto, he pulled on a pair of shorts, even though he was heading to a meeting with blue-chip VC Accel Partners. The outfit -- casual even by laid-back Silicon Valley standards -- didn't stop Accel from investing. Lavingia, an alumnus of hot online bulletin-board company Pinterest, raised $1.1 million for his payments start-up, Gumroad.

Buckley also ran into problems getting himself to Sand Hill Road. One night he stayed up until 3 a.m. and slept too late to get to a scheduled meeting with a venture-capital firm. "It didn't go down too well," he said, adding that his profuse apologies and requests to reschedule were met with a curt "no thank you."

Not to worry. Buckley, who had already sold a company while in high school for a sum he says was in the low six figures, raised more than $1 million from Andreessen Horowitz and others.

At the time of the missed meeting, he was attending Y Combinator, a three-month program for start-ups. In a nod to the boy wizard of book and movie fame, Y Combinator co-founder Paul Graham has called Buckley "the Harry Potter of startups," but said he was not the youngest to win admission to the program.

That honor goes to John Collison, now co-founder of payment company Stripe, who was admitted at age 16, but did not go through the program, Graham says. Instead, he and his then-19-year-old brother merged their company with another, Auctomatic, and sold it to a Canadian company for $5 million in cash and stock.

Most of the young entrepreneurs say their interest lies in building rather than selling their companies. Buckley had to say as much in response to inquiries he said received recently from Facebook about a possible sale. His determination not to sell stems from advice he received from a successful executive he met last year at Y Combinator: Mark Zuckerberg.

(Reporting By Sarah McBride. Editing by Jonathan Weber and Maureen Bavdek)

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