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MBA Entrepreneurs From Top B-Schools Raise $62bn In Venture Capital

Growing success for start-ups founded at world's leading business schools

Mon Sep 28 2015

Start-up companies founded by graduates of 25 top business schools have raised $62.8 billion in venture capital funding, according to a BusinessBecause analysis of data from PitchBook, a VC and private equity research firm.

PitchBook compiled a ranking of the top global universities and business schools for VC funding.

Top of the MBA list is Harvard Business School, whose 557 entrepreneurs have raised $6.7 billion for nearly 500 start-up companies. One Harvard venture, Oscar Health Insurance, a US health insurance company that utilizes technology and data, raised $327 million, valuing the start-up at $1.5 billion.

Start-ups from the top-10 mostly US schools have raised a combined $28 billion in VC funding. In addition, 38 “unicorns” — companies valued at or above $1billion — have been founded by MBA graduates.

“I’ve seen many companies make it and make it big,” said Katharine Boshkoff, VP of global career development for Hult International Business School, who added that MBAs are increasingly attracted to working at potential unicorns.

Stanford GSB in California and Wharton School at University of Pennsylvania complete the top-three. Both schools have produced more than 300 entrepreneurs each, who have gone on to raise more than $4 billion for their start-up businesses.

The ranking is dominated by US schools — including MIT Sloan, NYU Stern and UC Berkeley-Haas.

Dr Andrew Corbett, professor of entrepreneurship at Babson College in Massachusetts, said that the business school teaches students to be entrepreneurial in all that they do.

“No matter what you did yesterday, to be successful you need to be constantly exploring for new opportunities,” he said.

Northwestern University’s Kellogg School has educated 211 entrepreneurs. Those graduates have raised $2.7 billion for 194 start-up companies. At University of Chicago’s Booth School, 166 MBAs founded 151 companies, which have collectively raised $1.5 billion in VC funding.

European entrepreneurs have long complained about a lack of access to capital in Europe compared with the more mature venture capital industry led by Silicon Valley in the US.

“Seed money is abundant here…. But the real issue is growth capital,” said Simon Stockley, senior teaching faculty in entrepreneurship at Cambridge Judge Business School. “We are worried about this.”

However there are notable successes for some top European schools. INSEAD, a global school with a campus in Europe, has produced 165 start-ups that have raised funding of $1.9 billion. Houzz, an INSEAD venture that provides an online platform for home decoration, has raised $213 million in funding.

At London Business School, 84 graduate ventures secured financing of $380 million. The most noteworthy is WorldRemit, a UK fintech start-up, which has raised nearly $150 million in venture capital.

“We find that students are interested in being entrepreneurs,” said Lara Berkowitz, executive director of the Career Centre at London Business School. She added that “it’s not just about going into a big multinational corporation anymore”.

Graduates of Spain’s IE Business School have raised $360 million for 39 start-up companies. And HEC Paris of France has produced 42 start-ups, which have secured $275 million in VC funds.

Margaux Pelen, executive director of the Entrepreneurship Center at HEC Paris, said there is great talent in the European entrepreneurial ecosystem, such as successful entrepreneurs, venture capitalists, and mentors.

“Additionally it’s cheap to launch a company, and there are plenty of opportunities to do so,” he added.

Meanwhile, MBA graduates of Israel’s Tel Aviv University raised $1.1 billion for 80 start-ups, according to PitchBook.

One mooted reason for the success of university ventures is that schools provide close-knit communities that breed investor networks. The venture capital industry is based on relationships.

Eythor Jonsson, director of the accelerator at Copenhagen Business School, said a key element to its success is the involvement of venture capitalists and angel investors.

He added: “Successful entrepreneurs form the MBA alumni [network], and have been keen on helping ventures get the right connections internationally.”