Top 10 Programs For Entrepreneurship?

Stanford Graduate School of Business

Stanford Graduate School of Business

Top 10 Programs For Entrepreneurship

East Coast vs. West Coast.

Talk about a rivalry that has defined America! Traditionally, the east has represented power and heritage. With the right pedigree, you could open any door and live a life of privilege. As Americans grew restless, the west harkened the dreamers and inventors seeking freedom and opportunity. Each had its symbols that attested to their values. The east could boast Wall Street and the Capitol. The west could answer with Hollywood and Silicon Valley.

And each had their business schools. Harvard, Wharton, and Yale became bastions for blue blood bonding. And Stanford and Berkeley attracted disaffected contrarians who revolutionized how we think and live. Well, that’s the popular narrative, at least. In reality, Ivies are packed with immigrant and blue collar stock. And west coast schools have developed their own uber class of elites. And both dream of turning their ideas into big businesses.

Regardless of coast (or country for that matter), the entrepreneurial spirit is alive-and-well. Stanford boasts Nike and Trader Joe’s and Harvard counters with Bloomberg and Khan Academy. And who doesn’t associate Warby Parker with Wharton? But those are the big name, big ticket success stories. And if you’re an aspiring entrepreneur seeking an MBA, you’re probably asking, “What is the best program for me?”


The Financial Times (FT) recently sought to answer that question with its “Top Programmes For Entrepreneurship” ranking.  Using data collected in 2014 for its 2015 Global MBA ranking, FT evaluated global business schools on ten criteria, giving different weights to each. For example, two categories –

the percentage of MBA graduates who started a company and the percentage of companies launched in 2013 that were still operational – were each worth 20 percent of a school’s ranking. Similarly, a school’s assistance in helping students start and fund their enterprises were each worth 10 percent of a ranking.

American schools led the way, holding the top five spots in FT’s ranking. Not surprisingly, Stanford notched the top spot overall. Based on the FT’s metrics, Stanford had the highest percentage of MBAs enter entrepreneurship (40 percent) and use their startup as their main source of income (74 percent). At the same time, the Stanford sample also scored high in equity and support from the alumni network, including financing.


Stanford’s top finish is bolstered – and contradicted – by other entrepreneurship rankings. For example, a 2014 Forbes ranking of the most entrepreneurial American schools also placed Stanford number one.

However, this Forbes ranking, which relied on Linkedin profiles across the entire school, is a better measure for the entrepreneurial spirit across campus (Note: Stanford also ranks number one, according to Pitchbook, for startups launched with VC help by undergrads). A better gauge of Stanford’s entrepreneurial might is Poets&Quants’ “Top 100 MBA Startups of 2015,” where Stanford produced 31 of the top 100 best-funded startups of the past five years. Although this number fell short of Harvard Business School’s total (40), Stanford MBAs actually launched the top three companies in terms of investment (a collective $1.29 billion). Compare that to the remaining startups in the top 10 (which includes a firm co-founded by a Stanford MBA), where total outside investment is $1.36 billion. In other words, Stanford is winning where it really counts: Funding. In addition, Stanford ranks second (behind Babson College) in U.S. News’ entrepreneurship specialization ranking and fifth (behind Harvard, Babson, Ross, and Rice) in the Princeton Review ranking. However, the latter ranking is often derided as a joke due to its vague criteria.

Below Stanford, you’ll find MIT’s Sloan School of Management. Here, Sloan earned its highest marks for raising equity (91 percent), school financing (7.6 on a 10-point scale), and alumni networking and financing (8.9 and 7.9 scores out of 10, respectively). In recent years, the school is best known for its graduates launching Okta ($155 million in financing) and Locu ($70 million in financing). Overall, seven MIT startups made Poets&Quants top 50 MBA programs for startup funding, with these firms generating over $432 million in VC funding over the past five years.


Rounding out the top five on FT’s ranking are the University of San Diego, the University of Southern California (USC), and Harvard. San Diego, you say? Based on FT’s survey, the school has the highest percentage of female entrepreneurs (38 percent), with 100 percent of its startups still going (same with USC). However, other data points cast doubt on San Diego’s lofty ranking. For example, just 30 percent of Torero entrepreneurs list their startup as their main source of income. And only 44 percent have attracted equity. What’s more, San Diego had two of the lowest scores for school (5.6) and alumni (5.7) financing. In short, this school may produce startups, but few are probably growing (especially with a graduating class of 32 students in 2014). Compare that to Harvard, whose alumni have launched 13 of the 25 most-funded startups of the past few years (which have drawn nearly $1.5 billion in funding). If you were seeking results, which program do you think gives you stronger preparation with a better network – Harvard or San Diego? Easy call, though getting into HBS is another matter.

China’s Fudan University’s School of Management is the first international program in FT’s ranking, coming in at sixth. Other overseas programs in the mix include: Oxford Saïd, Vierick (Belgium), and ESADE (Spain). Babson College, which heavily infuses entrepreneurship in every class, also made FT’s list at eighth (It has been ranked first for entrepreneurship by U.S. News for over two decades). In addition, the ranking excludes several MBA programs renowned for their entrepreneurship programs, including Wharton, Michigan (Ross), Texas (McCombs), and Berkeley (Haas).

As you can guess, the FT ranking has a fatal flaw: It is based on a sample of 9,700 alumni from 159 schools (good for a 40 percent response rate). At minimum, 30 graduates must participate for their alma mater to be ranked. However, this participation falls far short of employment data collected by MBA programs as part of their annual employment reports. Based on FT’s methodology, the most recent survey (which is derived from the Class of 2011) receives a 50 percent weight, with the two previous class responses getting the remaining weight.


That creates a strong divide between FT survey data and school employment data. For example, according to Stanford’s 2011 employment report, 16 percent of its graduates became entrepreneurs. Compare that to FT’s data, where 40 percent of the sample started a company.  Obviously, FT’s Stanford sample was skewed towards entrepreneurs. What’s more, the employment report numbers are relatively consistent. For example, 13 percent of Stanford’s Class of 2012 started their own companies, with the 2013 and 2014 classes clocking in at 18 and 17 percent respectively. Other schools show a similar discrepancy. At MIT Sloan, for example, just 8.5 percent of the Class of 2011 started their own business. That number was 36 percent according to FT’s sample. And the divergence is even more pronounced at Harvard, where the difference between the percentages posted by FT and Harvard were 27 percent vs. 3 percent (with Harvard even liberally defining a startup as an organization that is “three years of age or younger”).

In short, FT’s ranking uses an off-center sample as its foundation. FT is either not getting a representative sample – or their respondents aren’t telling the truth. Even more, the methodology applies weights that aren’t proportionate to value, with equity – the ability to draw money — worth only 10 percent. At the same time, FT gives survival a 20 percent weight without bothering to factor in startup growth and funding levels. In short, FT’s ranking may include many top schools, but it likely does so by accident as much as anything.

Source: Financial Times

Source: Financial Times


Source: Financial Times 

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