Keeping Them Honest: Why We Should Ask More Questions About The Success of Teen Entrepreneurs, Investors, & Innovators.

We have seen the emergence of successful TeenVestors (young entrepreneurs, investors, inventors, and innovators) over the past few years. National news outlets and popular daytime television shows regularly feature TeenVestors running full-fledged businesses, displaying their scientific invention, or touting their investing prowess. Every once in a while, however, we are reminded that we need to be careful about buying such stories without taking a closer look. The quote below from says a mouthful:

“It didn't take long for New York Magazine's story on a 17-year-old stock whiz with a rumored net worth of $72 million to make a splash. But the story's juicy premise unraveled almost as quickly.” Money.Com


Lying About Success

The quote above related to a December 2014 story of a teenager who allegedly made $72 million in the stock market while still in high school. The story went viral on Facebook, was a front-page story in the New York Post and was featured in Business Insider after being published in New York Magazine. It didn’t take long for the lying teen, Mohammed Islam, to confess to making the whole thing up (See: Confession). As for New York Magazine, it now says: “We were duped. Our fact-checking process was obviously inadequate; we take full responsibility and we should have known better. New York apologizes to our readers.

This incident highlights what believes is a big problem when dealing with the claims of TeenVestors: some teen entrepreneurs, investors, and researchers exaggerate claims of success and underplay the amount of assistance they receive from their family members – and journalists are far too willing to believe them. 

For the record, we have been the biggest cheerleaders of young entrepreneurs and investors. In fact, we wrote the first book on how parents can help their kids become entrepreneurs (The Lemonade Stand: A Guide To Encouraging the Entrepreneur In Your Child – initially published by Bob Adams Inc.) and some of the earliest books on teaching teens to invest (TeenVestor: The Practical Investment Guide for Teens and Their Parents and  Mad Cash: A First Timer’s Guide To Investing $30 to $3,000 – Both published by Penguin/Perigee).  Over the years, we have researched hundreds of stories about honest TeenVestors and we have marveled at their desire to follow their passions to build a business or achieve some other innovation. Our website, attests to our faith and confidence in today’s youth to help craft solutions to the world’s problems whether through entrepreneurship, research, or other innovative activities. (See news items about TeenVestors on our website).

However, experience also tells us that some TeenVestors will exaggerate claims of success and in some cases, will lie outright. This phenomenon is not particularly new.  In the 1980’s, one of the first young swindlers produced by our research team was Barry Minkow. By the time he was 16 years old, Barry had already started his own carpet–cleaning business, ZZZZ Best. By age 18, he was a flashy Ferrari–driving millionaire living in a big house in California’s San Fernando Valley. By his twenty–third birthday, he was serving a 25–year sentence in a federal prison for 57 counts of fraud and conspiracy for billing insurance customers for bogus carpet restoration work. What makes this fraud by Barry really remarkable is that he fooled banks and big Wall Street executives alike. He fooled these professionals so much that his company was listed on the NASDAQ stock exchange at one point and had a market value of nearly $300million. (See our blog about Barry Minkow).

You may be asking, why does it matter if TeenVestors exaggerate claims of success? Who does it really harm? Outright fraud is not something we want to encourage amongst teen entrepreneurs, investors, and innovators for moral reasons. In addition, a TeenVestor who starts lying and/or exaggerating the level of his or her success at an early age will eventually get into legal trouble when the lies have to get bigger and bigger. 


Unproven Claims

While Mohammad Islam and Barry Minkow are blatant examples of fraud among the ranks of TeenVestors, there are other problems we see with other types of claims by some young people. For example, scientific claims by TeenVestors have often not gone through a peer review process by which scientists evaluate the validity of such claims. Science prizes are great but they are often accompanied by media hype that take on a life of their own whether the scientific claims are true or not. 


Ignoring The Existence of Helping Hands

Another problem regarding claims of TeenVestors is when they (or those who write about them) ignore the presence of “helping hands” in their journey to success. 

If, for example, a well-connected parent, helps his son or daughter get products into a major department store, it would be good to reveal that information to other young people who may read a story about the young entrepreneur. Why? Because we don’t want aspiring TeenVestors to easily give up if they don’t quickly reach the same lofty heights other young entrepreneurs seemingly reached effortlessly. In addition, it would be a good thing to demonstrate to aspiring TeenVestors that they too should seek mentors such as adult family members or family friends who can help them achieve success just like other successful young entrepreneurs.

When TeenVestors don’t reveal sources of help, it reminds me of students who ace exams and then pretend that they didn’t study or get tutored on the subject. Revealing how they achieved good grades may encourage other students to study harder or seek more help. This would be better than leaving other students feeling that there is something wrong with them as opposed to pushing themselves to do better or finding people who can help them academically. 

For the record, there is nothing wrong with getting help from family and friends in business. But we want more honesty in the disclosure of how some TeenVestors are making it big in business. 


Questions You Should Be Asking About TeenVestors 

The following are things that should be considered with regards the claims of TeenVestors. 

  1. Is the profit or revenue claim believable? In general, no TeenVestor who is just starting out in business or investing is going to make millions of dollars right off the bat.

  2. Did the TeenVestor receive a large amount of financial assistance from family – financial or otherwise; if a TeenVestor is getting thousands of dollars from dad or dad uses any influence he may have with Walmart (for example) to get his son or daughter started, I think other aspiring young entrepreneurs should know this.

  3. Is the TeenVestor truly the main individual running the business? If his or her parents are mainly the ones running the business, other aspiring young entrepreneurs should be informed.

  4. Has the scientific claim been peer reviewed in any scientific journal? The lack of peer review does not mean that the scientific claim is invalid but it does mean that enthusiasm about such a claim should come with disclaimers. 

  5. If the TeenVestor has developed an app, did he or she do the coding? There are many people who outsource coding of apps to other people so this is not a bad thing but it should be disclosed. 

  6. How did the TeenVestor get the business idea or come up with the scientific research?

  7. How did the TeenVestor get access to the scientific lab used for experiments? In general, no TeenVestor will be granted access to academic labs without some connection to the facility; once again, there is no crime in having such connections, but it should be disclosed.


Letting TeenVestors Have Fun

We would like for all TeenVestors to enjoy the ride of trying their hands at entrepreneurship, investing and finding innovative solutions to life's challenges. We don't think its so important that they  show how much money they are making or that they have made a great discovery no one has thought about before. At, we feel that it is enough for them to have the guts to step out of their comfort zone and take a chance at something with no absolute certainty that they will be successful. TeenVestors, in our mind, are already winners no matter what they achieve. No exaggerations of success or hiding sources of success are necessary. : Real Stories about Teen Entrepreneurs Shatter App-Builder Stereotype


The media’s focus on teen app developers and coders doesn’t tell the full story of young entrepreneurs. Yes, examples like Nick D’Aloisio, who reportedly made $30 million by selling a news summary app called Summly to Yahoo!, do exist.

However, despite the handful of successful high-tech and web start-ups, teens are starting low-tech, green, charitable, and science-based enterprises in the US and around the world in far greater numbers. Unbound by the restrictions of the adult mind, young people are doing innovative things – sometimes motivated by the desire to make money or the goal to improve lives. chronicles the diverse range of teen entrepreneurs, investors, and inventors. Here are a few examples of young entrepreneurs and inventors the site recently featured:

“I started Origami Owl with $350 and a simple dream in mind—getting a car on my 16th birthday. So, with all of my babysitting money and my family’s support, I set out to start my own business and created Origami Owl,” said Bella Weems whose company will make revenues of about a quarter of a billion USD this year.

Carter Kostler, a 15-year-old from Virginia in the US who was featured as a guest on ABC Television’s Shark Tank, had a different motivation for starting his own business. He was concerned about the youth obesity epidemic caused by the consumption of sugary drinks.

According to Nkem Modu, the Chief Curator of, “There are so many inspiring stories about teens exploring their hobbies and talents and turning them into businesses. It’s exciting to discover and share their experiences and motivate others.” Much more than providing inspiration for other teens, the site contains a wealth of learning guides and videos.

> See Many More Examples Of Extraordinary Young Entrepreneurs

New Generation of Teen Entrepreneurs Driven By Social Concerns

Winners of Google Science Prize (All 16-Years Old) With Experiment To Increase Crop Yields

Winners of Google Science Prize (All 16-Years Old) With Experiment To Increase Crop Yields

13-Year-Old Owner of Freetoes, Inc.  Who Takes Her Philanthropic Activities Seriously. 

13-Year-Old Owner of Freetoes, Inc.  Who Takes Her Philanthropic Activities Seriously. 

Teen entrepreneurs and innovators are increasingly motivated by social concerns. This dramatically contradicts the stereotype of selfish youth.

“30 years ago, the primary motivation for teen-led businesses was often solely to make money. Now most of the teen entrepreneurs and inventors we encounter are also motivated by the desire to help solve societal problems, in their own way,” said Emmanuel Modu, co-author of TeenVestor: The Practical Investment Guide for Teens and Their Parents and The Lemonade Stand: A Guide To Encouraging The Entrepreneur In Your Child.

Theories abound about the reasons for the increased number of socially conscious teen entrepreneurs and innovators. Is it because the internet has made information about social issues more accessible? Is it due to the Great Recession of 2008, which may have negatively impacted young teens’ lives and spurred them to improve the lives of others? Regardless of the reason, the trend is real.

Here are a few examples of socially conscious young entrepreneurs and inventors recently featured by – a news portal that reports on the activities of a diverse range of young entrepreneurs, investors, inventors, and other innovators around the world:

  • A trio of 16-year-old girls —Ciara Judge, Émer Hickey and Sophie Healy-Thow— from Cork County (Ireland) won the Google Science Fair Prize for proposing the use of a naturally growing strain of bacteria to increase crop yield by 30%.

  • Concerned about mass shootings in his home state, Kai Kloepfer, a high school student from Boulder, Colorado (US), invented a smart gun that unlocks with fingerprint authentication.

  • A group of teen siblings —Ima, Caleb, and Asha Christian— from Decatur, Georgia (US), helped create a "Yelp For Cops" to rate both positive and negative police interactions with citizens.

  • 13-year-old Katelyn Lohr from Vancouver, British Columbia (Canada) is owner of Freetoes Brand, Inc., which sells toe-less socks in major consumer outlets such as Toys “R” Us; she is very committed to her philanthropic outreach.

  • 18-year-old Tom Osborne from Nairobi (Kenya), upon seeing what deforestation has done to his community, embarked on a clean energy project to produce smokeless charcoal briquettes and distribute cook-clean stoves throughout Kenya. 

  • 15-year-old Kenneth Shinozuka, of Irvine, California (US), invented a device implanted in socks that alerts caregivers when Alzheimer’s patients wander off unaccompanied.

  • Teen Myla Swallow, from Sydney (Australia), and founder of the Clean Water Initiative, designed an inexpensive system to sterilize stainless steel baby bottles using a billy can and a simple pump-filter to produce steam.

These teen entrepreneurs and innovators are not just giving lip-service to charitable commitments. Asked in an interview by Forbes contributor Devin Thorpe why she is so passionate about charitable giving, Katelyn Lohr said that “helping people is always something I wanted to do and with the fame that Freetoes has given me, I have had lots of opportunities to give. And Project Aftershock (a Haitian Relief charity) is one of them.”

For many of these teen entrepreneurs and innovators, the idea of making money and doing good can co-exist. As stated by Google Science Fair Prize winner, Émer Hickey, in a FastCompany interview about her group’s use of bacteria to increase crop yields, “We want to change the world. We want to commercialize this.”

A Millionaire by 18, In Federal Prison by 23

Notorious TeenVestor turned Conman, Barry Minkow.

By the time he was 16 years old, Barry Minkow had already started his own carpet–cleaning business, ZZZZ Best. By age 18, he was a flashy Ferrari–driving millionaire living in a big house in California’s San Fernando Valley. By his twenty–third birthday, he was serving a 25–year sentence in a federal prison for 57 counts of fraud and conspiracy for billing insurance customers for bogus carpet restoration work.

While incarcerated, Minkow became involved in the Christian ministry, and upon his release in 1995 after having served approximately seven-and-a-half years in prison, he went to work at San Diego Community Bible Church (SDCBC).

Barry seemed to embody the worst of the 1980s. He was arrogant, flashy, greedy and unscrupulous. Minkow started out his business like any other young entrepreneur. But when he found financing hard to secure for his overly ambitious business goals, he turned to loan sharks. He also fraudulently overcharged his credit–card customers for work he never did.

The most incredible part of the Barry Minkow story is that he even managed to hoodwink jaded Wall Street investment bankers. By the time he was caught in 1987, Barry had swindled $100 million from investors and had used a good portion of this money to finance his lifestyle.

Barry’s story did not end after his early release from prison for good behavior. In 1997, Minkow became the pastor at SDCBC and soon thereafter founded the Fraud Discovery Institute (FDI), a for-profit entity that allegedly was aimed at the detection and prevention of fraudulent business practices. Through the work of FDI, Minkow soon garnered national media attention as a fraud detection expert, and his turn-around story was profiled on ‘’60 Minutes’’ in August 2006.

Yet even while working through FDI to detect fraud, Minkow was engaged in manipulating the stock prices of the companies he was investigating. Most prominently in 2009, Minkow released a report accusing major homebuilder Lennar of massive accounting irregularities and fraud. In the wake of this report, Lennar’s share price was sliced in half—from $11.57 a share to $6.55 a share. According to court records, unbeknownst to the public, Minkow shorted Lennar stock in advance of the issuance of his report. Based on these transactions, Minow was charged with conspiracy to commit securities fraud, and on March 30, 2009, he pled guilty in Miami to conspiring to manipulate Lennar’s share price, for which he was sentenced to serve five years in prison and to pay $583.5 million in restitution to Lennar.

Though currently in prison, he was recently charged with stealing money from the SDBC congregation. As part of his guilty plea, Minkow admitted to a long list of improper conduct, including opening unauthorized bank accounts on behalf of the SDCBC, forging signatures on SDCBC checks, using funds drawn on legitimate church accounts for his personal benefit, and charging unauthorized personal expenses on church credit cards. In addition, Minkow confessed to diverting SDCBC member donations for his own benefit and embezzling money intended as church donations. In all, Minkow admitted stealing—and concealing from the IRS—at least $3 million from SDCBC’s parishioners and lenders. As described in court documents, Minkow’s conduct continued for over a decade. On April 28, 2014, he was sentenced to 5 more years in prison.

I tell this story because I think you should be aware of what can happen when ambition and greed goes haywire. In addition, I want to point out to you that young entrepreneurs are also susceptible to the lure of the good life just like some of the stereotypical Wall Street tycoons you see on television. Yes, indeed, TeenVestors can be crooked, too. However, I also believe that they can be taught business ethics at an early age before problems manifest themselves. The lessons of course, begin at home.


More on how parents can promote good business ethics will follow. 

Common Business Mistake #1 By Teenvestors

The picture shows Teenvestor and owner of a dog shampoo company, A Boy and His Dog. His business was inspired by his dog. 

Common Business Mistake of Teenvestors: Not Including All Expenses In Profit Calculation

I was once advising a 16–year–old Teenvestor on how to run his baseball card business. Every two months, he would make a one–hour bus trip to Chicago to buy more cards for his business. When I asked him to calculate how much money it cost him to make this trip into the city, he came up with a figure of $10. When I asked him to include the cost of his meals and miscellaneous expenses during his trip, he increased his expense figure to $24. When I told him that he should include these expenses in pricing his cards, he protested. "I enjoy going into the city to buy new cards. I don’t see why I should charge my customers for this trip."

When I asked him whether he would go into Chicago as frequently if he didn’t have a baseball card business, he said no. When I asked him whether he subtracted any of his travel expenses when calculating his net profit, he said no. I then said to him, "You are not making as much money in this business as you think you are."

This young entrepreneur’s problem was simply that he did not consider all of his true expenses when figuring out the cost of each of his cards. Many young entrepreneurs make the same mistake. They forget that small expenses add up to big numbers and therefore should be included in the cost of their products of services.

Some young entrepreneurs are also not aware that they should include the cost of their equipment in making their products or offering their services. Take a typical teenage business such as lawn mowing, for example. Many Teenvestors who start lawn mowing businesses use their family’s lawn mower. As with all other mechanical equipment, the more a lawn mower is used, the more likely it is to require servicing. If the youngsters mowing the lawns neglect to include the cost of periodic servicing of the mowers, then they are overestimating the profit figures in their businesses.