If you are a list junkie and you’re interested in using an MBA experience as an incubator to launch a startup, you’ll probably turn to one of several rankings. U.S. News & World Report and the Princeton Review maintain that Babson College just outside Boston in Massachusetts offers the best MBA for would-be entrepreneurs. The Financial Times, meantime, crowns Stanford Graduate School of Business as the best place for MBA entrepreneurs.
Problem is, all three of these rankings are deeply flawed. U.S. News bases its list solely on a survey of business school deans and MBA directors which renders its ranking little more than a popularity contest. The Princeton Review list is based on a vague methodology that is so discredited that Harvard, Stanford, Wharton, UC-Berkeley, MIT Sloan, and other top schools decline to cooperate with. And the Financial Times list is little more than an odd offshoot of the alumni survey portion of its overall MBA ranking.
That’s why we at Poets&Quants take a dollars-and-cents look at business school success in the startup space. For the past six years, we’ve annually tracked the MBA startups that have raised the most money from angel investors and venture capitalists (see Top 100 MBA Startups of 2019). On one level, it’s the ultimate early test of a strong idea. If you pass muster with discerning outside investors who do nothing except look at potential deals day in and day out, you’re certainly done something right.
FOR MBA ENTREPRENEURS, ACCESS TO CAPITAL IS LARGELY DEPENDENT ON B-SCHOOL BRAND
How much money a startup raises is also really the only reliable number reported by a young, private enterprise where basic profit and revenue data is hidden from view. One clear takeaway from the 2019 list is that access to capital for a young MBA entrepreneur is brand dependent. In general, the better the business school brand, the more likely it will help you raise funding for your idea.
Using this show-me-the-money approach to evaluate a business school’s success in entrepreneurship also has its limits, of course. The biggest drawback is that it fails to capture much of the MBA startup activity that is bootstrapped. Its total focus on results also means that it does account for the number of entrepreneurship electives, the mentoring by serial entrepreneurs, and the possible financial support for an idea.
So for what it’s worth, we decided to crunch the numbers in those other three rankings from U.S. News, the Financial Times and Princeton Review, which publishes its list with Entrepreneur magazine. For the purposes of our composite ranking, we show the Princeton Review ranking but do not weight it at all in our overall list. That’s because so many of the best business schools simply refuse to cooperate with that ranking because it lacks any credibility. So the U.S. News and FT rankings, both from 2018, are given equal weighting in our composite index. For the FT ranks, we took out non-U.S. schools so they would not be disadvantaged by the fact that U.S. News does not rank online programs outside the U.S.
STANFORD AND BABSON SHARE FIRST PLACE ON THE COMPOSITE RANKING
Who comes out first on the list? Stanford GSB and Babson College. Round out the top five are No. 3 MIT Sloan, 4. Harvard Business School, and No. 5 Wharton. In the top ten are No. 6 USC Marshall, No. 7 Michigan Ross, No. 8 Chicago Booth, No. 9 Virginia Darden, and No. 10 Rice University Jones.
Notably absent from the top ten are schools that easily make our original ranking based solely on funding, including UC-Berkeley, Northwestern Kellogg, and Columbia Business School. On the composite list, they are further down, largely because each of those three MBA programs lacks rankings from both U.S. News and the FT. That is largely a function of how flawed these existing rankings are rather than any reflection on the quality of the entrepreneurship initiatives at those schools.
All told, 42 separate MBA programs are on one or more of the three rankings, but only 13 make both the U.S. News and FT lists. Ten of the schools only make the Princeton Review ranking, failing to get a mention by U.S. News or the Financial Times.
(See the following page for the remainder of the composite ranking)