Entrepreneurship has continued to gain ground at business schools. A host of executive MBA programs report a surge in their chief executives and senior managers leaving corporate careers to found their own start-up businesses.
A Financial Times survey of executives from the top-100 EMBA programs found that 31% have turned to entrepreneurship within three years of graduating.
The EMBAs, all of whom graduated in 2011, are also successful: FT data show that 91% of the businesses are still operating today.
Executive courses usually attract managers who are committed to careers within a large corporation. Traditionally, employers offer to fund these MBA degrees in return for a commitment to stay within a company, and often result in promotion.
But as funding dried up during the financial crisis many executives were forced to fund their own business education. The survey shows that only 27% of executive students are fully sponsored by their companies.
The data also show that those seeking promotion within their own company is now the lowest priority for students – behind management development, networking and increased earnings.
At the same time, the emergence of entrepreneurship in the business world has proved a strong lure for many, who are buoyed by ease of access to venture capital and blockbuster success stories.
Empowered by fiscal freedom, many of these executives are no longer bound to corporations and they see entrepreneurship as an increasing viable career path.
At Georgetown’s McDonough School of Business in Washington, up to 50% of students in a recent EMBA class were start-up founders, says Paul Almeida, senior associate dean of executive education.
“They don’t necessarily come in looking to be entrepreneurs,” he says. “But we do give them the skills, tools, the relationships, [and] maybe the mind-set that triggers that path.”
Full-time MBA programs have seen a similar surge in the adoption of entrepreneurship as a career path.
But entrepreneurs usually face barriers to enrolling on traditional EMBAs, according to Federico Frattini who is the director of MIP Politecnico di Milano’s Flex EMBA. But the increase in provision of distance learning means that executives can create business plans and launch ventures while maintaining full-time jobs.
About 20% of the Flex EMBA curriculum is taught on MIP’s campuses in Italy, Federico says, while the rest is taught through an online platform which uses a tailored version of Microsoft Lync, a similar service to Skype.
“Our program is critical for those people that have less time – such as entrepreneurs and people from start-ups or SMEs,” he says.
The trend is buoyed by the fact that most top EMBA programs are based in the United States, which has a stronger entrepreneurial ecosystem than Europe and where accessing angel financing and venture capital is easier.
Many US business schools have been trying to foster this growth. McDonough’s second residency allows EMBA students to create and pitch a business plan. This culminates in a competition in which teams deliver presentations to a panel of judges including venture capitalists.
The University of Pennsylvania’s Wharton School has also ramped up its entrepreneurial studies. The school, ranked sixth in the latest EMBA rankings, has professional entrepreneurs speak to its students, and EMBAs benefit from close proximity to each other during weekends while they’re in the program.
The Anderson School of Management at the University of California developed an entrepreneurial curriculum and certificate program for its executive MBA. This teaches subjects ranging from product feasibility studies to designing an exit strategy for a business.
Accessing finance is critical to the success of these programs. The FT survey found that 25% of executive entrepreneurs used angel financing such as crowdfunding to fund their businesses.
Silicon Valley has long been a source of cash for US start-ups but a report by the Crowdfunding Centre released this week found that peer-to-peer lending is prevalent across the entire country.
Sherwood Neiss, a principal of Crowdfund Capital Advisors, describes this funding growth as the “American Dream”.
“This is the best opportunity in our lifetime to empower tens of thousands, and if at least some of the barriers are removed, ultimately millions of Americans to take control of their own lives, create and build their own businesses,” Sherwood says.
The trend is much the same in Europe. HEC Paris, which jointly-runs the highest ranked EMBA program in the world with UK and US business schools, has an entrepreneurship and innovation major built into its EMBA.
The executives are taught to develop a better understanding of the conditions required to build and maintain a new business, as well as the drivers for successful innovation in new ventures.
Oxford Saïd Business School’s executive MBA allows students to complete an entrepreneurship project. EMBAs can undertake a project put forward by a sponsoring organisation.
Past projects include the acquisition of a new company with commerce technology company Demeure Group, and a sales and distribution plan for print-on-demand newspapers in London for Menzies, the magazine and newspaper distributor.
London-based entrepreneur Ashuveen Bhadal relied on her executive MBA skills to develop and launch a technology start-up after graduating from Cass Business School last year.
She spent ten years in the insurance industry but during the EMBA was turned toward entrepreneurship. She launched Drinqsmart, an innovative app that uses geolocation technology to alert revellers to drinks deals in London, with a co-founder last year.
“We had both started the [E]MBA with the intention of doing something entrepreneurial,” she says.
“When companies sponsor you, they want to tie you in for a few years,” says Ashuveen. She received a scholarship, knocking about £10,000 off the program’s price-tag.
Like many of the new breed of executives, Ashuveen places value in her business school degree despite the fact that she turned away from its traditional career paths.
“It gives you the tools and the mind-set,” she says. “So, you know what it means to have the intensity that is required in an entrepreneurial [venture]."