For Many Older Americans, an Entrepreneurial Path
nytimes.com
nytimes.com
Also: Many entrepreneurs do not pay themselves for a year or so to allow their businesses to gain traction.
Considering that most businesses fail within 5 years, I'm not enthusiastic about the older-than-55 crowd starting their own business. If you are fresh out of college you may be able to set up a company - you have time you put your finances back together, should the effort fail, but as a retiree you are looking at old-age poverty.
As mooreds mentioned in his comment[1], they might already be looking at old-age poverty. People are living longer, healthcare costs are rising, retirement funds are not keeping up, pensions and retirement benefits are being gutted by corporations and governments alike. So, speaking as someone who has a retired relative trying this idea, the downside might be minimal.
Business closure rates (at least here in the UK) are around 10% a year. So although your statement is technically true (it would reach 50% after 5 years) these are not necessarily "failures", just closures, and many businesses last 20 years or more. I started 1 business in 1992; have had 3 others that I closed after 6 months, 2 years, and 6 years respectively. 2 were unprofitable, 2 were highly profitable. How does that skew the figures?
Entrepreneurship has never been a young person's game until recently. Older people have more cash and fewer liabilities - children have left home and mortgages are paid off - so have more financial flexibility.
Investing 12K from savings is no big deal when you are older and actually have saving to invest. And as for paying yourself - you have a retirement income.
I don't see any disadvantage at starting a business at 20 nor at 50. 30, seems to be the biggest problem since you have all the commitments and few resources.
Pair that with a) boomers needing more money because they have fewer pensions and are living longer, b) older folks have some accumulated capital (either financial, human or relationship) and c) the flexibility of a lifestyle business (even if you work longer hours, you can timeshift), and it doesn't surprise me that older folks are starting more businesses.