The Top 20 B-Schools for Entrepreneurship

by Lauren Everitt on

Harvard  comes in at No. 1 with a whopping 34 startups on Poets&Quants'  top 100 list

Harvard comes in at No. 1 with a whopping 34 startups on Poets&Quants’ top 100 list

How do you determine the best B-school for starting up a business? There are plenty of rankings that promise to parse arcane data points to reveal the true hierarchy of entrepreneurial education. But none focus solely on resultsthe number of successful startups a school produces and how much capital its budding businesses have collectively raised.

Poets&Quants crunched the numbers to produce the first results-based ranking. The survey is based primarily on the total number of startups a school produced that landed on our top 100 listing. These are exceptional companies: To make the cut, a startup had to attract at least $1.6 million in investment. (Most startups get by on bootstrapping and funding from friends and family.) Investment served as the second metric–Poets&Quants‘ sub-ranked the schools according to the cumulative amount of funding their listed startups received.PoetsQuants-300x250-MagazineAd2

Harvard Business School, with 34 startups, and Stanford’s Graduate School of Business, with 32 startups, blew away the competition, proving that the student and alumni networks of those schools are a potent force to fuel and sustain new ideas. The two MBA heavyweights accounted for more than half of the total number of startups on our top 100 list.

MIT’s Sloan School of Management came in a distant third with 11 new enterprises. The B-schools at U Penn, Chicago, and Columbia trailed behind with three startups each. (We did not adjust the numbers to account for class size.)

The results weren’t entirely surprising from the standpoint of traditional B-school rankingsHarvard and Stanford frequently rotate in and out of the top spots. However, these results represent a sharp division from conventional entrepreneurship rankings that have been severely flawed. And they show the profound importance of alumni networks in funding new companies.

For years, the Princeton Review and U.S. News & World Report have published their own orderings of the best graduate programs in entrepreneurship. Interestingly, the B-schools at MIT, UC-Berkeley, Northwestern, and Wharton are conspicuously absent from Princeton’s listing because they decline to cooperate with a ranking school officials say has little credibility. In fact, 2013 marks the first year that Harvard and Stanford participated. Top schools also question the publication’s “black box” methodology, which relies on surveys sent to school administrators and some 30 vague data points.

U.S. News & World Report adopts a more open approachthe publication surveys deans and MBA directors for their opinions on top programs. However, critics contend that the process invites bias, allowing schools’ past reputations to boost or hinder their numbers. Besides, most deans have little to no knowledge of how entrepreneurship is taught at other business schools.

Michigan’s Ross topped Princeton’s listing, while Babson’s Olin nabbed the No. 1 spot in the U.S. News ranking. Both schools made the cut for Poets&Quants‘ top 20, coming in at No. 13 and No. 12, respectively. Harvard, Poets&Quants‘ top startup school, came in third in Princeton’s assessment and fourth in U.S. News’ report. Stanford’s status was a bit more stable across rankingsit scored the No. 2 spot on both Poets&Quants‘ and U.S. News’ ranking. The more unpredictable Princeton assessment put the school at No. 6.

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  • Ryan

    I don’t know but objectively looking at the data, Stanford clearly wins for me. 1) Stanford class size is less than half of Harvard’s (understandable that fewer startups come out of Stanford – AND the numbers differ only by 2 startups), and 2) Stanford startups are way more successful (total 980M funding) compared to Harvard’s (total 575M funding)

  • P&QJokes

    I would look at LBS and INSEAD for entrepreneurship data, which P&Q seems to have overlooked?

  • JohnAByrne

    We did look at LBS and INSEAD. The startups they nominated didn’t make our list due to the lower level of funding.

  • Jake

    Yeah, what a short-sighted way to rank them by only using total number of start-ups…

  • Ryan S.

    Funding is also a pretty weak way of indicating success in regards of start-ups. Funding does not equate to success.

  • JohnAByrne

    Not really. Funding is a terrific way to look at startups. For one thing, it’s the most accessible metric available to evaluate a young business. For another, it a near perfect reflection of third party assessment of a startup’s idea, leadership team, and potential. Angels and venture capitalists who make the ultimate put-up, or shut-up bet on a new company and its founders do so only after a fair amount of due diligence and in the context of looking at hundreds and/or thousands of other possible investments. Given the time period we covered–2008 to 2013 when the Great Recession was in full force, this is smart money chasing smart ideas and people. In the absence of more traditional measures of business success–such as return on investment, return on equity, revenue and profit growth–external validation from people who are smartly making bets on new ideas within the context of a market is a great way to look at the success of a startup.

  • Ryan S.

    Touche.

  • Tim

    Any reason for using absolute numbers instead of comparing the number of startups to the class size?

  • Dan

    i’m similarly wondering why there was no accounting for the size of the class. I think using the nominal number skews things in a way which isn’t really justifiable.

  • JohnAByrne

    Ryan,
    Obviously, you make a great point and one to which I gave serious consideration. Generally, in all kinds of lists and rankings using numbers, I prefer to show readers the raw data rather than “adjust” numbers. The reason for this is simple: I think adjustments lead to all kinds of distortions. I prefer the reader to made his or her own “adjustments” of the presented data.
    As you no doubt know, Harvard graduates about 900 MBAs a year and Stanford GSB graduates just under 400. But you also probably know that a much higher percentage of Stanford MBAs go the entrepreneurial route: In the Class of 2013, a record 18% of Stanford MBAs started their own companies vs. just 7% at Harvard, 7.4% at Wharton, 7.3% at MIT, and just over 6% at Columbia Business School.
    If I were to “adjust” the Harvard and Stanford numbers, for example, it would show that in the past five years–the period of our analysis–Stanford had about 280 MBAs start their own companies vs. Harvard’s 270. Essentially, 12.6% of the MBAs who founded companies at Harvard made our Top 100 list vs. 11.4% of those at Stanford.
    So the “adjusted” results are pretty much the same as the raw results we present.
    In any case, I hope you see what I mean. This gets even more complicated because many other business schools have not kept very good records on the number of students doing startups each year–especially when you go back five years.
    The other thoughtful point you make is the considerably larger amount of money raised by Stanford’s 32 startups vs. Harvard’s 34. Stanford startups raised an average of $3.1 million each vs. Harvard’s $1.7 million. We attribute this difference to Stanford’s location in the heart of Silicon Valley where most of the VC money is the country is based. Many venture capital firms have Stanford MBAS working in them and that provides Stanford companies with greater access to capital. We point this out in the article and show those numbers in the table to make that point clear.

  • JohnAByrne

    Tim,

    Obviously, you make a great point and one to which I gave serious consideration. Generally, in all kinds of lists and rankings using numbers, I prefer to show readers the raw data rather than “adjust” numbers. The reason for this is simple: I think adjustments lead to all kinds of distortions. I prefer the reader to made his or her own “adjustments” of the presented data.
    As you no doubt know, Harvard graduates about 900 MBAs a year and Stanford GSB graduates just under 400. But you also probably know that a much higher percentage of Stanford MBAs go the entrepreneurial route: In the Class of 2013, a record 18% of Stanford MBAs started their own companies vs. just 7% at Harvard, 7.4% at Wharton, 7.3% at MIT, and just over 6% at Columbia Business School.
    If I were to “adjust” the Harvard and Stanford numbers, for example, it would show that in the past five years–the period of our analysis–Stanford had about 280 MBAs start their own companies vs. Harvard’s 270. Essentially, 12.6% of the MBAs who founded companies at Harvard made our Top 100 list vs. 11.4% of those at Stanford.
    So the “adjusted” results are pretty much the same as the raw results we present.
    In any case, I hope you see what I mean. This gets even more complicated because many other business schools have not kept very good records on the number of students doing startups each year–especially when you go back five years.

  • Ryan

    I agree there are many adjustments you need to do to the “number of startups” metric to be objective (you can’t really just use % of those starting companies at graduation either — as pointed out in your other article, the companies might have been started before the founder enrolled, or not immediately after graduation). Also, this metric is very sensitive to ranking methodology (what if the 101st and 102th startup are from Stanford – why pick the arbitrary top 100 number?). Therefore there is a very weak case for using “number of startups” as the primary metric for ranking.
    I would agree with your point that if company valuation information is not available, funding amount is a good proxy for that. And I also think funding should be THE primary metric that is already inherently objective – that you don’t need to “adjust”. This metric is also not sensitive to methodology – even if you count top 101/102/150/200 startups, Stanford will still win with a large gap because funding amount will get insignificant as you go down the list.

    I find your point about Stanford having an “unfair” advantage due to its proximity to the valley to be very confusing/irrelevant. Location is really THE advantage of the school and many would argue that having access to relevant alumni base and capital is THE defining factor in choosing which business school to enroll if your goal is to start your own company.

  • where16

    I very much like when you jump into the fray on comments when stories are first out, then fall back as conversation becomes self-sustaining and shifts inexorably to ad-hominems.

    So someday soon when you’ve reached critical mass, you’ll be more editor and others will be moderating and contributing? If this day is now, I’ve half a mind to nominate myself…provided comp is better than 200k and I do matriculate, I’ll have interest, availability and capacity for a new gig, make me an offer…that’s to run this place FT while FT school, if you wanted me to leave current rockstar position but not be in school it’d cost more than that.

    And seriously – I take the time to say this in gratitude – I’ve no idea how I could’ve learned so much about this field 10 years ago. Probably buy U.S. News, apply to the first handful of schools and call it a day

  • Not a “start-up” enterpreneur

    You’re making a fundamental assumption that Entrepreneurship = Start-ups…that’s a pretty narrow definition. What about those who buy distressed companies and transform them, or those that are happy starting small service-based business (less than 10ppl) and don’t require millions in funding, or buying a franchise business? Do none of those count?

  • not prestigious

    Well, the examples you’ve mentioned are not “cool” and in “hot” sectors, and therefore not prestigious enough for most top MBA students to be interested in.

  • Applicant

    Personally, as an aspiring applicant to Business Schools, I would much rather join a school with a higher number of start-ups, hence a higher chance in absolute terms of starting my own business (I am saying this regardless of the class size because absolute terms matter more in this case). I also believe that Harvard (granted this is mostly based on the extensive research I have made comparing different B-schools) offers the highest number of post MBA job options (both in terms of type, industry and number of companies).
    Well, again both are great schools anyway. I however never thought HBS will lead the pack in entrepreneurship as well… Good for them.
    .

  • FERdos

    the entrepreneurship is not in european business culture, nor they support it. few british universities (cambridge science park and silicon fen) started very humble steps but away behind..its really shame that even in asia (singapore, hong kong, korea, shanghai) governments, businesses, universities started supporting entrupuners in early stages, yet, europe seems to be stuck with old fashion way..i believe european business schools need some “marshal plan” for business education…

  • P&QJokes

    That’s a very uneducated response. INSEAD was founded by George Doriot, considered as the father of venture capital in the US and globally. INSEAD is actually well known for its entrepreneurial focus, let alone the fact that the school itself is entrepreneurial, reaching out to the world with campuses in Asia and Middle East. John’s measure is based on more recent hard data such as funding, an area where INSEAD is supposed to be weak, given its lower level of endowment.

  • Nadya

    Can you share which startups INSEAD nominated?
    The school wasn’t mentioned in previous research you published also. Yet I
    personally know founders of startup that raised $4.6m. And another one,
    which just closed $1m+. This is from the top of the head.
    Entrepreneurship focus is strong there, 5-7% of students start companies after program.

    INSEAD (2 intakes of 500 per year) has campus in Singapore (for 200 students) in addition to French one (for 300), plus exchange programs with Wharton, Kellogg and dual degree with Hong Kong. It’s hardy just “european school”. It’s very global, so it promotes global vision, where entrepreneurship is essential part.

    While in San Francisco for few weeks I was surprised that not many people heard of this school, where I was proudly got admitted. Some asked me if it’s Spanish or Swiss.
    There is INSEAD community in Silicon Valley, many alums work in startups, as well as my future peers. Some Americans intentionally opted for the school because of it’s international and entrepreneurial culture.

    However, it still feels like a bubble for others – whatever exist outside of US is considered “out there” and not quite relevant. The view on European MBAs being simply academic is quite stereotypical still. Times are changing.

  • H M

    I think location to the valley also tipped the odds in favor of Stanford, alums or not – we don’t have data on how much of the total investment was funded directly or indirectly by alums for each school

  • MBA & Company

    Great to see at least 3 European start ups on there which is great. Any start ups need to hire MBA qualified consultants for the hour for business projects then go to number 98 on the startups lists – http://www.mbaco.com

  • Luuk

    As coming from the none USA angle, why is it that 98% of new Enterprises fail and why there is no mention of this. Why is there only mention of does going to the 20 institutions and nobody is talking about those, who start without any of the above schooling. It is not only VC what makes a business, it is people who make a business.
    The four pillars of Enterprise are and will always be: Communication, Negotiation, Presentation and Listening skills and these balance off any other issues connected with a start-up.Without the above there is NO business.
    Success depends on the persons and I meet many every day from 14 to 25 and older, who have great ideas and concepts ( all of us have appr.5000 over a life time), but do not have any of the above skills.
    I facilitate with others as an extension of the Educational Institutes, but also to SME’s and Corporates and find that our participants have as well the “Question” as well as the “Answer” and use this for their own success.
    Business is not based on jobs for he “Boys”, but success for those who work on it.

  • Basi T

    1.6MM in investment? So if you are from a school with not great networking in place (no direct access to venture capital or other formally structured investors) but you start a business through your friends or family or informal angels, makes you lesser/ not qualified? Why? This criteria is highly biased to favor the top ranked schools because they simply provide much more in networking and access to sophisticated investors and much less in ingenuity and originality.

  • John Surdyk

    Any data on UW-Madison you can share with me? We have a robust entrepreneurial ecosystem, and nearly 1/2 of my business plan competition entrants start companies. Many are grad students in the sciences, but I I imagine some MBA program data may be missing! Thx! http://bus.wisc.edu/~/media/5ec54a3e593340b3a282d6c0f767e871.ashx

  • Admitted.ly

    Interesting data. As others have mentioned, I wonder if amount of funding received is truly the only successful measure of a start-up and if limiting the definition of a start-up skews your data.

  • Peter Aguele

    Why will funding a start-up be a parameter for ranking?its absurd!

  • ivyleaguertoo

    what absurd criteria. anyone can raise fundng. tons of undergrads do as well
    its what you do with the funding and the execution and exit that matters
    has any research been done as to how many of the start ups have executed and scaled
    I know one of them is already shutting down cause the business model did not work
    as usual, any criteria to make hbs on top

  • marcus

    John.. with all due respect that is the most back-assward rationalization I have ever heard. And why do you think the VCs are located at Stanford? STANFORD.

    the VCs come to Stanford.. not the other way around in your bizarre alternative universe explanation.. STANFORD was instrumental in developing the ecosystem for startups.

    Stanford wins hands down. 280 Stanford startups at double the funding rate despite having less than half the graduates of the number 2 school.

    Not even a contest..

    it’s laughable to hear your rationalizations when the stats speak for themselves. Please.

  • marcus

    I might also add that the top VCs in the country are physically located on Stanford land ie Sand Hill Road. by design.. to be close to Stanford University.

  • Darpan

    I really don’t understand the presence of Babson in all the rankings i have referred to for entrepreneurship . Is it only because of the percentage of students who have taken the start up route and the size of funding? Or there is a qualitative analysis of the course structure and academic experience for this ranking . Also , would these entrepreneurship rankings be useful for a person who intends to enter a well established family business after his MBA ( which can be considered as entrepreneurship but not a new startup) ?

    I respect the effort gone into the rankings posted above. Thanks . It would be great if I could get some insight in the above context.

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