Each year when Poets&Quants puts together our Top MBA Startups, there are many impressive startups that just barely miss the cutoff. And while venture capital and angel investments tend to be the most objective publicly available measurements of a fledgling company, there are obviously other methods of evaluating the success and potential of a startup. So we like to acknowledge the 50 schools just missing our top 100 ranking, which is based solely on funding raised.
Like the Top 100 ranking, the startups included on our Best of the Rest ranking were all founded between January 1, 2012 and December 31, 2016. They all have at least one founding member to graduate with an MBA during the same time. And they have all raised at least $1.5 million in funding.
This year’s list has raised a combined funding amount of more than $132 million. These companies’ founders have graduated from a dozen different business schools — 11 in the U.S. and one in the U.K. And like the Top 100, they are offering incredibly unique, interesting, and beneficial services and products.
FROM GLUTEN-FREE BAKING MIXES TO A LUXURY FRAGRANCE BRAND TO REAL ESTATE SOFTWARE
Take Simple Mills, which tops the list, having raised $4.22 million since being founded in 2013. Founded by Chicago Booth School of Business grad Katlin Smith, the company sells snack crackers and baking mixes for pretty much everything you could think about baking, from artisan breads to cakes to muffins. A Charlotte, North Carolina native, Smith launched Simple Mills after graduating from Booth but began creating baking mixes when she learned she and members of her family had allergies to many ingredients found in already available products. Simple Mills’ baking mixes don’t have refined sugars, gluten, or any genetically modified ingredients.
Following Simple Mills on the list is San Francisco-based Agentdesks. The real estate-focused software company was founded by Harvard Business School grad Sanya Gurnani and Biju Ashokan, a computer science engineer, in 2014. Since then, the company has raised a total of $4.05 million. Columbia Business School-founded Amper Music, an artificial intelligence technology startup that creates soundtrack music, followed with $3.92 million. Pinrose, founded by a team from Stanford’s Graduate School of Business, followed in fourth with $3.9 million. The San Francisco-based luxury fragrance brand was actually 90th in last year’s Top 100 ranking, when the cutoff was $2.65 million. But this year the cutoff jumped to $4.3 million — meaning 23 of the startups on this year’s Best of the Rest list would have made last year’s top 100. Others to get knocked off last year’s top 100 were PayPlug, Nebia, Careport Health, and Drivemode.
While Harvard Business School and Stanford’s GSB tied for 24 startups each on the Top 100 list, HBS asserted its entrepreneurial dominance on this list, staking claim to 13 of the 51 Best of the Rest startups. Those startups have raised a combined $35.76 million. Columbia Business School claimed the next most, with eight startups raising a combined $17.64 million; The Wharton School followed closely with seven startups raising a combined $18.22 million; Stanford’s GSB was next, with six startups totaling $16.3 million; and after Stanford is Northwestern’s Kellogg School of Management, which had five startups raise $15.18 million. Taking the Top 100 into account, Harvard Business School claims 37 of our top 151 startups for 2017, Stanford’s GSB claims 30, and Wharton and Columbia Business School each have 19. Northwestern’s Kellogg has the next most — 13 of 151 total.
GOING BEYOND ‘A QUICK HIT OF CASH’
Of course, funding raised is not everything when it comes to measuring a startup’s potential. Last year, when UC-Berkeley’s Haas School of Business failed to place any startups in the Top 100, Rhonda Shrader, director of the Berkeley Haas Entrepreneurship Program, made some good points about evaluating startups and the ideas and entrepreneurs behind them. “I think in terms of the funding question, I definitely don’t see that as a validation of whether or not it’s a worthy idea,” Shrader told Poets&Quants a year ago. “Some other methods I look at are sales and sale productivity per employee. How many customers you have. That’s an indicator of your base and your sales for the future. I think those are all very important.”
At Haas, which ended up with four startups on the Top 100 ranking and two on this list, Shrader says the lifetime of smaller, bootstrapped companies is a better indicator of a company’s success and potential than quick VC cash grabs.
“So we tell the entrepreneurs to control the controllable,” she says. “Focus on building a sustainable and scalable business, with the fundamentals in place. That’s going to serve you so much better than a quick hit of cash.”