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Start-Up Success And Funding Become Measure Of Business Schools' Quality

As more start-up founders turn to business education, entrepreneurship and VC funding statistics are fast becoming a measure of business schools’ success.

Tue Dec 9 2014

BusinessBecause
Brandon Segal is a superstar of his business school community. Dr Segal's, the family-run start-up business that he has helped to grow into a retail force in Canada, can pin much of its early success on his ambitions to become an entrepreneur.

He believes that a master in management program has helped him to both grow the company through its conceptual phase and widen his pool of skills to include the many facets that a start-up demands of its founders. The business makes compression socks, appealing to a younger audience by keeping a close eye on both fashion and technology.

“[I] was able to utilize many of the skills that I learned at Sauder to help form the business,” says Brandon, a graduate of the Sauder School of Business in Vancouver.

“The MiM program does a good job of introducing you to a wide range of topics… Understanding the basics of each of these elements is extremely beneficial when being part of a start-up,” he says.

Brandon illustrates the way entrepreneurs are increasingly turning to business education to grow their ventures.

Entrepreneurship is fast becoming a measure of business schools’ success. By collating data on how many students have turned to start-ups and how many have secured venture funding, they are able to attract new candidates to their postgraduate programs.

This metric may soon be as important to prospective students as salary increases and job placement data, all tabled in most MBA rankings.

“Entrepreneurship has generated tremendous interest,” says Dr Andrea Belz from the Lloyd Greif Centre for Entrepreneurial Studies at USC Marshall School of Business.

“We use a ‘teach a person to fish’ model – many experienced investors come to the classes and coach our students on fundraising, and our alumni network actively works to connect opportunities and capital,” she says.

But tracking venture success is difficult and many schools struggle to provide an accurate picture of how many students are “entrepreneurs”, and how many of their companies ultimately prove to be successful. “Certainly around half are interested,” says Andrea.

Many start-up companies are also “bootstrapped” – self-funded with cash from students’ own pockets.

Yet entrepreneurs are the new rockstars of the business school world. As students show more interest in pursuing their own business ventures, schools are going to lengths to track alumni’s start-up success rates and capital raising valuations.

Stanford GSB, a US school with close ties to Silicon Valley, is but a few minutes’ drive from a collection of some of the world’s most active venture capital groups, on Sand Hill Road. The Californian cluster is home to venture funds of Sequoia Capital, Blackstone Group and Accel-KKR, all big Bay Area players.

According to October data, 65 MBA students – 17% of the class – started a new business, but Stanford did not release any further details of students’ companies.

But alumni success stories will encourage entrepreneurs to join the school, and may paint a less corporate image than in times past.

Notable Stanford successes include OkCupid, the matchmaking website, which was founded by MBA graduate Sam Yagan and later acquired by Match, the dating website, for $50 million in cash in 2011.

At Harvard Business School, a clearer picture has emerged. Software firm EverTrue has compiled data on start-up investment for the MBA class of 2010, which has raised at least $734 million in venture capital funding.

Since 2008, when Harvard’s MBAs raised $84 million in VC funding, its entrepreneurs have been more successful in raising cash, but this has fallen from 2010’s peak to $218 million in 2012, according to EverTrue data.

Significant investments include a $249 million injection into Drafiti, an e-commerce group, and health insurance firm Oscar Insurance, which raised $150 million in investment, according to the data.

At the Booth School of Business in Chicago, start-ups that used its business plan competition have raised about $3.7 billion in market exits.

These include GrubHub, the online takeaway delivery service which raised $50 million in a series E funding round before merging with rival site Seamless, and mobile payments group Braintree, which was acquired by eBay last year for $800 million.

In London, Cass Business School dishes out up to £10 million to student and alumni start-ups through its entrepreneurship fund.

This includes an investment in Bet Buddy, a supplier of user data analytics software for gaming companies that was founded by alumnus Simo Dragicevic, which went on to raise $3 million in a private funding round in 2013.

The UK has strong entrepreneurial numbers but investments tend to be much smaller than in the US.

However, the Judge Business School will take pride in the significant investments raised by start-ups from its base, the University of Cambridge.

Cambridge has pooled £2.7 million into early-stage technology start-ups this year alone, and has over its lifespan produced 14 companies valued at more than $1 billion.

Significant investments include those into Horizon Discovery, a biotech group that that raised £68.6 million after listing this year on AIM, London’s junior stock market, and microchip designer ARM, which is listed on NASDAQ and the LSE with a market cap of £13.3 billion.

“The culture of the UK venture capital space is different in comparison to the US,” says Maria Nikolou from the Entrepreneurship Centre at Oxford's Saïd Business School.

“Oxford and other similar universities are building ecosystems with a long term sustainability approach,” she adds. “These communities of founders and supporters take time to mature and many of the important pillars are now in place.”

But data from PitchBook, a VC and private equity research firm, show that US business schools’ start-ups have raised much more in venture capital funding than ventures in Europe.

The firm's report, which ranked the top-25 MBA programs globally in terms of number of entrepreneurs, company count and VC investment, found that Harvard, Stanford and Wharton MBAs raised the most capital.

Only two European business schools are included in the top-25 – INSEAD, which has a campus in France, and Spanish institute IESE Business School.

For Brandon in Vancouver, Dr Segal's has not received any investment from outside the family. But it has not stopped him from expanding; the company’s products are sold in 850 retail stores across Canada.

“The basic accounting background, entrepreneurial courses and intro to finance and economics have helped me the most so far,” he says of the MiM program. He has, however, taken part in the popular investment pitch TV show Dragon’s Den, due to air in 2015. “Although I can’t say what happened on the show,” he adds. “People should tune in to find out.”

Student Reviews

Bayes Business School

Student

Verified

31/10/2023

On Campus

Best Journalism school in Europe

When I first stepped onto the campus of City, University of London, I knew I was in for a ride - and not just on the Tube! With its vibrant energy and an impressive repertoire of programs, City U became my home away from home. The Journalism program was kind of a big deal. Rumour was that we were the best in Europe! The lecturers were not just experts in their field; they’re practically journalistic royalty. They were invested, passionate, and had a knack for turning the most flat press release into a riveting news story. With their guidance, I’ve learned to navigate the chaotic world of media like a pro. The campus was a melting pot of every culture, being that we had such a diverse international crowd. Being in the heart of London, I had the world at my fingertips - there was always a new corner to explore, a hidden gem of a cafe to discover, or a street performer! City, University of London wasn't just a university; it was a chapter in my life story that I’ll never forget.

Lydia

Verified

23/02/2023

On Campus

Learning environment

The teacher-learner ration is manageable, giving each learner a chance to gain personal attention. It is also easier following up on the progress of a student, as the numbers per class is not large. the conducive environment for learning includes clean classes, standard desks, world class instructional facilities and the opportunity to engage lecturers even after their sessions. The team spirit at City is above board, with learners getting chance to learn both from instructors and colleagues. This is the university of choice; the place to be.

Nathaniel

Verified

24/01/2023

On Campus

Classes

I liked that each class had a manageable number of learners, making the professor-learner ratio favor knowledge acquisition. I also liked that study schedules were manageable, and not overwhelming. The focus on talents and gifts even within the learning environment makes it possible for learners to achieve the best of their potential, and this has worked to the advantage of those that have schooled at City, University of London

Muhammad

Verified

24/01/2023

On Campus

Classes

The diversity at City University facilitates interactions and is a direction toward the unity of the world. The classes are well built to match the number and needs of all students regardless of the elements of diversity that set people apart. The use of technology in delivery makes learning even more interesting and achievable. At City University there is no distinction pegged on the issues that make people unique.

Dorah

Verified

23/01/2023

On Campus

professors

The team of lecturers at the Uiversity are well experienced. Their level of insight and the methodologies of delivery works for the interes of the leaeners. My learning experience was largely boosted by the level of knowledge of the professors at the institution, and their passion to transfer the same to learners. I appreciate every class I attended because of the level of insight I was able to gather

Nora

Verified

17/12/2022

On Campus

The best university I’ve been to

The campus and the people I've met have made it a wonderful experience. I was reared in a small town with a graduating class of only 88 individuals, so moving to City University was a huge adjustment for me. My dorm has more residents than my whole high school combined! I enjoy the atmosphere here, and everyone is so friendly. Outstanding academic options and a stunning campus. Really great from beginning to end. The educators genuinely love what they do, and the students are ready to learn. On or around college, there is always something to do with friends, and the social scene is particularly warm.

Antonia

Verified

21/11/2022

On Campus

Bayes Business School

As a student at City university attending Bayes Business School I would totally recommend choosing this university as the experience is exceptional with great social networking opportunities . Professors are significantly helpful, delivering with excellence and professionalism. Everyone is happy to help and make you feel welcomed in such an esteem university as City, offering exceptional development and guidance through out the course.

Muhammad

Verified

15/11/2022

On Campus

Economics and Politics

Incredibly amazing university, the way they polish students and help them boost their morale and think intellectually is worthwhile. Many universities have international partnerships to allow exchanges between their students. The most obvious subjects for these opportunities would be those that involve languages, and the study of people and places.

Navya

Verified

11/11/2022

On Campus

Clinical biology

I really like it it’s perfect for me with not too many people and not too few either. All the modules are amazing. I love the toy bar. I love all the societies that I’ma part of. Especially the colour Bollywood society

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