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Harvard, Wharton Startups Beat Stanford In VC Funding

Startup Garage

Startups by Harvard Business School and Wharton MBA graduates raised more venture capital in the past five years than those by Stanford University’s Graduate School of Business, according to a newly published survey of VC-funding. But the biggest gap in startup funding between HBS and Stanford largely occurred in the money raised by Harvard women.

In the past five years, $1.2 billion of venture capital funding backed companies started by female MBAs from Harvard, nearly seven times the $234 million raised by women with MBAs from Stanford. The amount of money going to companies founded by women with Wharton MBAs also put Wharton ahead of Stanford in overall funding. Female entrepreneurs with Wharton MBAs received $437 million in VC funding, almost double the Stanford amount. Women played a crucial role in allowing Northwestern’s Kellogg School to beat Chicago Booth as well. Female MBAs from Kellogg raised more than eight times the VC funding as their Booth counterparts, $134 million vs. a mere $16 million, respectively.

The data comes from a new study of VC funding by Pitchbook, a venture capital and private equity research firm. The firm tracked numbers from the start of 2010 through the end of July 2015, drawing from its venture capital database of more than 25,000 valuations and over 78,000 VC-backed companies. This is the third year in a row that Pitchbook has produced these lists, for both MBA programs and undergraduate universities. The firm lists the top 25 schools in rank order by the number of MBA founding entrepreneurs from each school receiving venture capital money.

HARVARD MBAS RAISED $6.7 BILLION IN VC FUNDING IN THE PAST FIVE YEARS

Aside from bragging rights, the list shows which schools’ MBAs are succeeding in raising capital for their ideas and companies from venture capitalists. Business schools have substantially increased their investment in entrepreneurship in recent years as student demand for these courses has exploded. The University of Chicago’s Booth School of Business, for example, has doubled down on its investment in entrepreneurship in the past five years, while Chicago rival Kellogg has set a goal of being in the top three of all business schools in entrepreneurship. Booth now says that entrepreneurship is its most popular MBA concentration, nudging aside finance in the past year.

So far, it seems like the Big Three are winning the race–at least when it comes to venture capital money. Overall, Harvard Business School topped the funding list, with 497 startups that raised a total of $6.746 billion in venture capital money. Wharton MBAs slightly edged out Stanford, raising $4.084 billion versus $4.077 billion. Wharton’s VC funding total, moreover, was spread over fewer companies, 285, compared to 341 at Stanford.

Of course, Harvard and Wharton both graduate substantially more MBAs every year than Stanford. Harvard typically sends out more than 900 MBAs annually, while Wharton produces more than 850. Stanford, on the other hand, graduates less than half that number, just over 400 MBAs a year. If not for the fact that a significantly higher percentage of Stanford MBAs start companies (17%), compared to Harvard (8%) or Wharton (7%), those class size differences could very well account for the reasons why HBS and Wharton outdo the geographic advantages of Stanford being in the middle of Silicon Valley and the VC firms on Sand Hill Rd. But once you apply those percentages to the graduating classes, HBS typically produces about 74 entrepreneurs a year while Stanford puts out 70–not much of a difference.

Only 11 business schools on Pitchbook’s top 25 list boasted MBA graduates who had raised more than $1 billion, and just two of those schools were outside the U.S.: INSEAD and Tel Aviv University. After Harvard, Wharton and Stanford, MIT Sloan and Northwestern University’s Kellogg School of Management rounded out the top five, with MIT grads attracting nearly $3.4 billion in VC money while Kellogg MBAs raised $2.3 billion (see table below).

  • marcus

    the John Byrne Spin machine at work… lols! it’s a gigantic difference.. btw… Stanford is the birth place of Silicon valley… as in was instrumental in its development starting with the first university industrial park that currently employs 17k tech workers. and yes it’s great John figured out that Sand Hill Road is actually part of the Stanford campus… he’s catching on.

  • marcus

    Stanford Biz has raised more money, more startups on a per student basis..
    in the same pitchbook analysis Stanford undergrad came out as the top school.. soundly trumping Harvard undergrad (the undergrads have similar class sizes unlike the Biz schools)

  • C. Taylor

    Yes, albeit this is a five year window. Aggregate funding is useful to see who’s filling VCs’ eyes with stars. But median funding per entrepreneur would be more insightful than the mean. Aggregates aren’t quite as useful due to the lopsided nature of funding.

  • Hailey

    Um because basically any time you rank business schools by any hard financial metric, it is demonstrated yet again that SOM barely deserves its place in its rankings peer group (Ross, Darden, Johnson, Stern, etc.) much less has any hope of challenging the schools entrenched above it.

  • Brand ho

    how can Yale SOM be not even in the top 20? with the “Yale name”, and the fact that it is an “ivy league” business school, and it admits so many people who went to ivy league undergrads, how can it rank below places like usc and carnegie mellon? no doubt it will be “top 5 in 5 years”.

  • fidel305

    Unicorn sightings by their nature can’t be counted on to occur on your timetable. And I have great difficulty with VC funding as a measure of entrepreneurship. (the NE has a far greater number of well funded failures than silicon valley)

    But if you want to play that game, here’s one that didnt make your list

    Four years ago Mike Cagney left Stanford Graduate School of Business and launched SoFi, the San-Francisco based student loans provider. Flash forward to the present day and the entrepreneur presides over a business that has just raised $1 billion in venture capital

  • C. Taylor

    At first blush this may appear intuitive. But I’d go with Mr. Byrne’s earlier comment that “class size is not as relevant as the number of people who become
    entrepreneurs because that is the subset of the class we’re talking
    about.”

    Thus my below ranking.

    Successful entrepreneurs per class size is useful as well, to gauge the relative entrepreneurialism of the class. But class sizes aren’t what they appear–given part time, EMBA and other avenues for obtaining the same MBAs. We need the total MBA output from each school per year to appropriately account for that. I’d hazard this would drop Babson relative to Harvard.

  • fidel305

    hmmmmm? another masterpiece of sophistry. or worse…

    “If not for the fact that a significantly higher percentage of Stanford MBAs start companies (17%), compared to Harvard (8%) or Wharton (7%), those class size differences could very well account for the reasons why HBS and Wharton outdo [WTF??? out do? lmao] the geographic advantages of Stanford being in the middle of Silicon Valley and the VC firms on Sand Hill Rd. [more like Stanford being an integral part of that]. But once you apply those percentages to the graduating classes, HBS typically produces about 74 entrepreneurs a year [out of 1,000]while Stanford puts out 70 [out of 400]–not much of a difference [ a HUGE difference]. ”

    GSB has a class size of 400 and according to your table produced $ 4B

    Sloan has a class size of 400 and produced $3.3B

    Both are far better than the 2 programs you choose to highlight [for whatever reason]

    HBS has a class size of 1000 yet only produced $6.7B

    Wharton has a class size of 1000 and only produced $4B
    get someone to do the per capita math for you

  • StatCheck

    yes, ranking by class size I think makes the most sense – ie amount of funding / class size. Then it’s:
    1) GSB
    2) MIT
    3) HBS