Which College Major Has The Best Odds Of ‘Producing’ A Unicorn? Hint: It’s Not Business

Hoping to found a billion-dollar company some day, but not sure what the best academic path is? Your best bet may not be an MBA.

That’s because even though a plurality of “unicorns” — companies with billion-dollar valuations — founded in the last 26 years had at least one member who studied business at the graduate level, the odds are slightly less than even that your company will achieve unicorn status.

Or so the data suggests. A new trove of it was released recently by Ilya Strebulaev, founder of Stanford’s Venture Capital Initiative, which analyzes the venture capital and innovation ecosystem, especially unicorns. In releasing the VCI’s latest batch of unicorn data, he asks the question, “What graduate majors have a higher likelihood of ‘producing’ a unicorn?” And the answer: not business, but medicine, followed by computer science and mathematics.

TROVE AFTER TROVE OF VC DATA

Ilya A. Strebulaev of the Stanford Graduate School of Business

Strebulaev, a finance professor at Stanford Graduate School of Business since 2004 and one-time Poets&Quants Professor of the Week, regularly posts new data on his LinkedIn page. When last we checked in with him in August, he had announced a new set of numbers showing that his academic home had launched the careers of more than 300 startup founders who have created more than 200 unicorns. — more than 40 more billion-dollar companies than the next closest school, Harvard.

Strebulaev wrote August 31 that the VCI had found that 33% of all venture capital deals have a founder and an investor who studied at the same university. “Interestingly, there is a significant variation in the presence of shared alumni connections in VC deals, even among schools of similar prestige,” Strebulaev wrote, noting that the results are based on his research paper “Alumni Networks in Venture Capital Financing,” co-authored with Jon Garfinkel, Erik J. Mayer, and Emmanuel Yimfor.

“For instance,” he wrote, “while 45% of the deals involving investors from Harvard also involve at least one founder from Harvard, the figure drops to 20% for deals involving investors from MIT and founders from MIT.”

There’s been more data on unicorns from the VCI — much more. In late 2021, Strebualev reported that the best age to become a unicorn founder was between 30-34 years; that unicorn founders don’t need an academic degree, but it helps to have one; and that 94.5% of the founders of VC-backed startups between 1991 and 2018 were male. Earlier this year, Strebulaev reported that data suggests an MBA is not a prerequisite to entrepreneurial success by showing that unicorns are more likely than not to have achieved their status without the help of a founder with an MBA — or who attended business school at all.

ODDS ARE LESS THAN EVEN A BUSINESS MAJOR WILL HELP FOUND A UNICORN

How did the VCI conclude that medicine, computer science, and math were better majors for aspiring unicorn founders than business? Researchers first identified the educational background of “the founders of 1,110 U.S.-based, VC-backed unicorns and 1,028 randomly selected VC-backed companies, matched only by the year of the first VC round,” Strebulaev writes on LinkedIn. “650 unicorns and 620 random sample companies had at least one founder with a graduate degree (master’s, including MBA, or Ph.D.) from a U.S. university. Therefore, 58% of unicorns have had at least one founder with a graduate degree. What’s even more striking is that for the random sample it is 60%, meaning that getting a graduate degree does not increase your chances of founding a unicorn.”

But while business was the most popular graduate major among startup founders, with 42% of unicorns having at least one founder who studied business at a graduate level, it was also a major found at 47% of random sample companies — meaning it is not the major that carried the best odds of hitting unicorn status. “If we compare these statistics to the overall results, we get the odds ratio of producing a unicorn,” Strebulaev explains. “Business has an odds ratio of 0.9, meaning that companies started by those studying business have a smaller than average chance of becoming a unicorn.”

When ranked by their odds ratio, he writes, the top three fields are medicine (1.4), computer science (1.3), and mathematics (1.2). The second most popular major is engineering, with 29% of unicorns and an odds ratio of 1.2; computer science ranks third, with 24% of unicorns and an odds ratio of 1.3. And the lowest odds ratio among the 10 most popular selected for analysis? Physics, at 0.8.

BUSINESS IS THE MOST POPULAR MAJOR FOR WOMEN UNICORN FOUNDERS

In a separate post, “Celebrating the Academic Diversity of Female Startup Founders,” Strebulaev notes that only 7% of the nearly 3,000 founders of U.S.-based, VC-backed startups that became unicorns between 1997 and 2021 are women. That’s only 181 women unicorn founders — “a stark gender disparity,” he writes.

What did these women founders study in college? The VCI found 31 different majors, with business the most popular (52 founders), followed by biology (37), computer science (24), engineering (23), political science (20), and economics (17).

“Their educational attainments also differ,” Strebulaev writes, offering one noteworthy cases:

• Undergraduate degree: Consider Anu Sudarsan, who co-founded Starburst with a bachelor’s degree in engineering, and Anne Wojcicki, who founded 23andMe armed with a bachelor’s degree in biology.
• Masters: For example, Sarah Leary co-founded Nextdoor with an MBA, while Shadiah Sigala embarked on her journey to co-create HoneyBook with a master’s degree in political science.
• Doctorates: Daphne Koller, with a PhD in computer science, co-founded Coursera; Michal Tsur, with a PhD in economics, co-founded Kaltura.
• Dropouts: Kim Kardashian and Emma Grede jointly founded the $4 billion unicorn SKIMS. However, there are only six women dropouts who went to become unicorn founders, out of 181 total.

“Women from diverse educational backgrounds go on to become unicorn founders,” Strebulaev writes. “But there are still very few female startup founders.” And he closes with an entreaty: “Please share your suggestions for strategies to change the balance.”

DON’T MISS WOMEN AT THE LEADING U.S. & GLOBAL MBA PROGRAMS: 5 TOP SCHOOLS REACHED PARITY IN 2023 and WHICH SCHOOLS PRODUCE THE MOST UNICORN FOUNDERS? THIS STANFORD PROF HAS THE ANSWERS