Everyone knows you don’t need an MBA to start a company. But what most people don’t know is how ultimately powerful the MBA experience is in shaping a new business concept and getting it successfully off the ground.
More MBA students than ever are now using their two-year educational experience to incubate new companies, and more business schools are adding professors and entrepreneurship centers to effectively turn themselves into launch pads for new businesses.
At Stanford’s Graduate School of Business, a record 18% of this year’s class chose to do a startup. That’s significantly higher than the frothy dot-com days of the late 1990s when 12% of the class went the entrepreneurial route. At Harvard Business School, the professors who teach entrepreneurship now are part of the second largest faculty group after finance.
Entrepreneurship is not only alive and well at business schools all over the globe. It is fast becoming the thing to do, pulling many freshly minted graduates away from the consulting, finance, and marketing jobs that have long been the mainstay of the traditional MBA playbook.
So it’s worth noting which schools have produced the most successful MBA startups of the past five years and which entrepreneurial ventures have made it.
To find the best of the bunch, we contacted more than 50 business schools worldwide and asked each to nominate their most successful MBA entrepreneurs. We interviewed professors, consulted with investors, searched the Internet high and low, and ultimately invited startups to nominate themselves. All told, we looked at more than 400 companies to compile our list of the top 100.
Getting data on private companies is no easy task. Many entrepreneurs weren’t willing to share such basic financial information as net income, annual sales, or return on equity. But one number was fairly accessible: the amount of financing a startup was able to raise from investors.
So our list of the top 100 is based on that put-up or shut-up metric: the total amount of funding captured by a startup. It is the ultimate vote of confidence in the idea, the business, and the founders. And after both the dot-com crash in 2000-2001 and the Great Recession of 2008-2009, investors in new, fledgling companies are exercising more due diligence than ever before. This is smart money chasing smart people and smart ideas. To account for smash hit companies that started out lean and later sold for millions, we accepted the sale price in lieu of funding figures.
To make our list of the top 100, an MBA startup had to have raised a minimum of $1.6 million, although 61 of the 100 most successful have already managed to convince investors to hand them $5 million or more, and over one-third have raised more than $10 million. The top 100 MBA startups have been able to attract total funding of nearly $2 billion. Not bad for a bunch of MBAs starting out from scratch.
Who came out No. 1? A Harvard/Stanford duo behind the social media marketing company, Wildfire. Launched in 2008 by Harvard Business School MBA Victoria Ransom and her now husband, Stanford Graduate School of Business MBA Alain Chuard, Wildfire hit the jackpot when it was acquired by Google in August of 2012 for a reported $350 million, plus $100 million in retention bonuses. Ransom and Chuard still run the company as a unit inside Google.
Not surprisingly, Harvard and Stanford are well represented in our best of breed. Harvard leads the pack with founders at 34 of the top 100 startups. Stanford follows close behind with 32. MIT Sloan is next with 11, followed by Wharton (3), the University of Chicago’s Booth School (3), and Columbia Business School (3). But there’s a wide variety of business schools whose MBAs are on the list, from the University of Arizona and Babson College in the U.S. to IE Business School and IESE Business School in Europe.
Internet startups dominate our ranking, particularly those in ecommerce. From diapers and baby products in Brazil to designer prescription eyewear and tailored scrubs, MBAs are selling a wide array of products and services online. Others are pursuing highly ambitious ideas across a variety of sectors, including satellite imaging, natural gas, semiconductors, and student loans.
What they all share in common is a game-winning pitch, a successful business strategy, and a keen desire to control their own destiny.
(See next page for our ranking of the Top 100 MBA Startups)