Study: Venture capital funds entrepreneurs of different ages, education levels

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Founders of new business types that receive capital to create a corporation tend to be between the ages of 35 to 44, though venture capital firms appear to evenly distribute funds to entrepreneurs with either undergraduate or graduate degrees.

The extensive study by CB Insights looked at new companies in the U.S. from January to June 2010 to determine who was a “typical” recipient of venture capital.

Forty-eight percent of company founders receiving funds were between 35 and 44 years old, while another 29 percent were between 26 and 34. The 18 to 24-year-old age group received just 4 percent of funding. In addition, 51 percent of the founders held a graduate degree.

CB Insights chose to undertake the study to find out what drives venture capitalists.

“When we ask venture capitalists what gets them excited about the young, emerging and often unproven companies in which they invest, we never hear about deals and dollars,” the report states. “This demonstrates just how crucial human capital is in venture capital investment decision-making.”

The VC law firm Fenwick and West reported that although the estimated value of new start-ups in the second quarter of 2010 was 30 percent higher than the previous quarter, the total money raised by venture capital firms to fund the companies actually decreased.