Written by Jack Tai, CEO & Co-Founder of OneClass.
June 9, 2020
Startup culture is unique. It requires innovation, bold ideas, the business savvy to identify market opportunities and a network of funders to support success.
Yet the trajectory from college to startup is often not clear. How do students go from doing biology homework to disrupting industries?
At some colleges, education is more likely to lead graduates to launch successful startups. Students who attend these schools could be immersed in a pre-startup culture that rewards nontraditional thinking. They could be developing a startup mindset or connecting to an entrepreneurial network of people.
Let’s look at which colleges produce the most startups using three different metrics: funding, innovation and incubation.
Which colleges produce the most VC-funded startups?
Access to capital is a clear indicator of how a college student would be able to take their ideas from a classroom to the marketplace.
Venture capital is a key indicator of a successful fast-growth startup. By analyzing the relationship between VC and a startup founder’s college, we can identify trends about which colleges are preparing students to be entrepreneurs.
In an analysis of 13,000 startup founders, PitchBook tallied first-round funding between 2006 and the end of August 2019 by the startup founder’s college or university. The global analysis revealed that 9 out of the 10 top schools for VC funding were in the U.S. As one might expect, Silicon Valley schools rank highly, as do Ivy League schools in the Northeast.
The undergraduate programs that produced the most VC-backed startups are Stanford, UC Berkeley, MIT, Harvard, University of Pennsylvania, Cornell, University of Michigan, Tel Aviv University, University of Texas and University of Illinois, in that order.
Many of the colleges on the list are no surprise. Schools such as Stanford have been widely known for their contribution to the startup scene, with alumni having founded companies that include Snapchat and DoorDash. State schools have also produced a large number of well-funded startups.
Students who attend these colleges could be more likely to receive an entrepreneurial-minded education, and their college credentials could make their startups more attractive to investors. However, startups can happen anywhere, and VC will flow toward the best ideas.
Nevertheless, there is a clear advantage to attending college if you’re seeking VC funding. Researchers have found that 92% of CEOs completed college, and when Bloomberg looked at 2,005 founders of VC-backed startups, it found that only 94 had dropped out or didn’t attend college.
Which colleges produce the most innovations?
Innovation is another important metric that indicates a startup’s ability to be ahead of the curve, creating new products, ideas and experiences.
When Reuters identified the world’s most innovative universities, it looked at patents as a way to quantify innovation. The overall ranking includes factors such as successful patent applications, the commercial impact of the innovation and the innovation’s impact on subsequent R&D.
The top universities for patents and innovations between 2012 and 2017 are Stanford, MIT, Harvard, University of Pennsylvania, University of Washington, UNC Chapel Hill, KU Leuven (Belgium), University of Southern California, Cornell and Imperial College London (UK).
Interestingly, five of the most innovative schools overlap with the list of schools producing the most VC-funded startups, and Stanford topped both lists.
In looking at the other five schools that produce strong innovators, one reason that they don’t also top the VC-funding list could be due to the type of innovation the schools have produced. For example, UW’s research on using AI to detect cancer cells would likely have a different business outcome than the University of Pennsylvania graduates launching Warby Parker.
When choosing an innovation-focused college degree, prospective students can research a school’s specializations and outcome potentials to see they match their own business interests. It’s important to also look at the professors’ areas of expertise to see what types of projects are ongoing.
Another helpful strategy is to look at how innovation and entrepreneurship could be developed across different majors. For example, a STEM major who is doing cutting-edge research within their field could dovetail their skill set with business coursework. Thus, their schooling would maximize both innovative development and the startup skills that can be attractive to VC funders.
Which colleges have the most successful business incubators?
The third metric for how college can lead to successful startups is university-related business incubators. Research shows that university incubators have a lasting impact on a startup growth, thus helping more new companies reach viability.
To look at how university-linked incubation programs bridge academic life and business success, UBI Global analyzed programs around the world, looking at factors such as the program’s impact on economic growth, access to network partners, access to funding and more.
Here are the U.S.-based incubators UBI has recognized and some of the top colleges with which they’re affiliated: Startup Aggieland at Texas A&M University, Studio G at New Mexico State University and New Mexico colleges, 1871 at the University of Illinois and Chicago-region colleges, Emerging Technology Centers at Johns Hopkins University and other Baltimore colleges, and Los Angeles Cleantech Incubator (LACI) at UCLA, California Institute of Technology, and other Los Angeles schools.
Each of these programs has had strong results. For example, among the alumni of Baltimore-based ETC, startups have raised $2.3 billion in follow-on funding.
Each incubator program will have a different application process and a different set of resources that can help students launch successful startups. However, one of the most important criteria for students to consider is how the program can expand their networks.
Because student entrepreneurs will not have wide networks that have been built through long careers, networking opportunities can be especially valuable for student incubators. Look for opportunities that help you connect with industry leaders, other student entrepreneurs and potential funding sources.