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$60M Michigan Ross Donation Highlights B-Schools' Entrepreneurship Trend

Generous US donation underscores growing push to help MBA students launch and scale start-up ventures.

Tue Jul 21 2015

The $60 million gift given to the University of Michigan’s Ross School this month underscores the growing trend of entrepreneurship at top schools.

The donation from the Zell family, wealthy US investors, is one of the largest ever to be dedicated to building entrepreneurial expertise at a business school.

Some $10 million of the gift will be used to create a fund specifically to invest in student ventures.

The announcement comes at a time when interest in entrepreneurship at top schools is booming, fuelled by lower barriers to entry and the rise of digital technology among other factors. Michigan Ross in the last academic year supported the launch and growth of more than 100 start-ups.

“This gift generates tremendous opportunities for our students and is significant news in the world of entrepreneurial studies,” said Alison Davis-Blake, dean of Michigan Ross, adding that the donation will support student learning and new business ventures.

The number of entrepreneurship programs offered by colleges and universities has quadrupled in the US since 1999, with leader schools such as Babson College, MIT Sloan and Berkeley’s Haas School reporting huge numbers of MBAs pursuing their own ventures.

Michigan Ross’ fund highlights how schools have sought to provide seed capital. Michigan Ross has pumped nearly $4.4 million in funding and engaged more than 5,500 students through a portfolio of programs including three student-led venture capital funds.

Successful exits include Intralase, an optical laser company that raised $86 million when it listed on Nasdaq in 2004, before being acquired for $808 million in 2007.

The University of Western Australia this month kicked off a new program designed to encourage and foster entrepreneurship among post-graduate students. 

Anthony Fortina, director of the Office of Research Enterprise, said UWA wants to develop links to the entrepreneurial ecosystem in Perth, it’s base city. 

At the Stern School of Business in New York, students received $200,000 in seed funding this year at an annual competition for entrepreneurs, held by the Berkley Center for Entrepreneurship & Innovation.

“There are multitudes of sources of capital out there,” said Jeff Skinner, executive director for the Deloitte Institute of Innovation at London Business School.

The UK business school has its own business angel group which MBA students pitch to, and the LBS Venture Capital Club has 6,000 members. Its Entrepreneurship Summer School has produced successes including WorldRemit, the London financial technology company which raised funding of $100 million in February.

Imperial College Business School recently added a venture capital and growth finance course to its MSc in Innovation, Entrepreneurship and Management.

“We’ve seen a trend in prospective students and businesses shifting from learning about starting businesses to growing them,” said Diane Morgan, associate dean at Imperial College. “This coincides with the amount of early-stage companies in the UK and their ambition to grow their businesses.”

Cambridge Judge Business School on Tuesday launched a new Entrepreneurship Centre to support venture creation and growth, announced on Twitter.

Yet start-ups and technology companies in particular across Europe lament the lack of venture capital funding compared with the funds available in the more mature US market.

Bethany Coates, assistant dean at Stanford GSB in California, said: “The Silicon Valley financing environment is very mature at this point and not all markets are as mature.”

However, the venture capital scene is warming up in the UK, believes Dr Shailendra Vyakarnam, director of the Bettany Centre for Entrepreneurship at Cranfield School of Management.

“Increasingly, there are programs both local and national that provide increasing amounts of support,” she said, through hackathons, pitch competitions and crowdfunding.

Michigan Ross told BusinessBecause recently it plans to open a start-up accelerator this year, which will invest up to $25,000 in students’ companies. In May the business school had raised a funding pot of about $2.5 million to support the initiative.

The $60 million Zell family donation brought the total of financial support provided by the foundation to the University of Michigan to more than $150 million.

“Our goal is to accelerate the learning curve and the opportunities for budding entrepreneurs,” said Sam Zell, a University of Michigan alumnus and chairman of Equity Group Investments. “I believe that fostering entrepreneurial education is an investment in the future,” he added.