Many critics of MBA education say you don’t have to go to business school to become an entrepreneur. While that’s certainly true, the evidence is that an MBA degree–especially one from an elite school–breaks open the doors to significant funding from venture capitalists.
According to a newly published PitchBook study, no school’s MBA founders have done better than Harvard Business School. Since 2006, the report says, an amazing 961 with a Harvard Business School students or alums are behind 961 startups with at least one venture funding round. That’s more than 300 startups higher than Stanford Graduate School of Business, which has had 636 startups receive VC backing during the same timeframe. Pennsylvania’s Wharton School had the third most companies with 506. Of course, Stanford’s alumni base compared to Wharton and HBS makes their number particularly impressive.
Still, more impressive than the school stats is the overall level of entrepreneurial activity. In the past decade, the study found that more than 6,600 MBAs have founded more than 6,000 ventures that have raised nearly $100 billion in venture backing. And that’s just from the top 25 schools to be included in the report. Not surprisingly, perhaps, Harvard Business School’s 961 companies also had the most venture backing at more than $22.4 billion. The GSB’s 600 plus companies gathered over $14.4 billion. And Wharton-founded enterprises rounded up more than $10.6 billion. With more than $47.5 billion raised, those three schools account for nearly half of the venture capital backing to be raised by the top 25 on the list.
SOME 23 OF THE TOP 25 BUSINESS SCHOOLS BOASTED STARTUPS THAT RAISED MORE THAN $1 BILLION
Impressively, out of the top 25 schools to make the list, just two — Oxford’s Said and Virginia’s Darden — had ventures that raised less than $1 billion during the ten-year timeframe. Interestingly, five California-based schools made the top 25, accounting for 1,288 of the 6,035 companies to be included and just under $24 billion of the nearly $100 billion in venture backing.
For the past four years, PitchBook has compiled lists of startups based on founders’ alma maters to create the PitchBook Universities Report. To be included, companies had to have at least one funding round during the time period of January 1, 2006 to August 2016. According to PitchBook’s senior research analyst and lead on the project, Garrett Black, PitchBook software flags qualifying companies and then researchers screen the data to build out company and founder profiles.
This year was the first PitchBook included 10 years of data instead of five. Some top ventures from HBS to be included were Zynga, Oscar, and Grab. Stanford’s SoFi tops the list in terms of venture funding for the GSB. Wharton’s dianping.com was topped the list for having raised the most capital from a school’s alumni network.
HARVARD & WHARTON BELIEVE THE PITCHBOOK REPORT NAILED IT
How solid is the PitchBook report? According to Tom Eisenmann, the faculty co-chair at Harvard Business School’s Rock Center for Entrepreneurship, for HBS alumni-founded companies, PitchBook’s data is “quite good.” Eisenmann says he asked his colleagues at the Rock Center to check a random sampling of more than 100 HBS-founded startups against PitchBook’s data. Rock Center researchers checked if those ventures had a PitchBook startup listing and if the founder’s profile on PitchBook included “HBS affiliation.”
Eisenmann says the “results were impressive” and “by far the best” they’ve seen from “an information service like this.” More than 90% of the startups Rock Center researchers checked were represented in PitchBook’s data. Those not to be included were likely small startups with less than $1 million in funding, if any, Eisenmann explained. Of the 90% to be identified, 95% were given HBS affiliation.
At Wharton, Karl Ulrich, the vice dean of entrepreneurship and innovation, says he believes the list is “pretty reasonable.” However, Ulrich points out that venture-backed companies are a small fraction of startups to be coming out of Wharton. Besides the unicorn list PitchBook compiles, the school rankings emphasize inputs rather than outputs.