The Financial Times (FT) recently released their business school rankings for Entrepreneurship, along with data revealing the percentage of business school graduates who started their own companies within three years of graduation.
Whether or not you agree with FT’s rankings methodology, the data on the number of MBAs going into entrepreneurship is striking.
For example, Stanford’s Graduate School of Business (GSB) saw 34% of MBA graduates start their own companies within three years of graduation, more than double the class of 2012 (14%). HBS saw 6.4% of graduates start their own companies by the time they graduated, and 28% within three years of graduation. 5.7% of Wharton MBA graduates started their own company by graduation, and within three years that jumped about fourfold to 20%.
Anyone with an interest in entrepreneurship and the southeastern United States may be interested to learn that Duke Fuqua MBA graduates have been taking to entrepreneurial endeavors with fervor in recent years. In 2012, only five of the school’s graduating class of 442, or just over 1%, started companies. Three years later, 17% of Fuqua MBAs had launched their own enterprises.
In the short-term, aspiring entrepreneurs often work in another company to gain experience and a perspective on their target industry, and to save money to fund their ventures. The finding that many students start a company after earning an MBA is no surprise, however the percentage of graduates launching companies in the first three years after graduation is extremely high, and perhaps reflective of the relative ease of raising capital in Silicon Valley in recent years.
Another interesting point to note is that recent MBA grads and younger entrepreneurs seem to be taking a risk-mitigating approach to entrepreneurship, with many of them maintaining a side-job while they start a company. Only 54% of HBS company founders rely on their entrepreneurial endeavors as their primary source of income. At Stanford, it’s 39%. And only 3 of the 25 schools for which data is provided in FT’s report have a majority of entrepreneurs depending on their own companies for their paychecks: UCLA, Harvard, and Birmingham Business School in the U.K.
Interestingly, the most successful school, as measured by the percentage of companies still operating at the time of the survey, was not HBS, the GSB, or Sloan. Georgetown McDonough MBAs claimed 93% their companies were still up and running, the highest percentage of all schools surveyed. The lowest percentage came from Chicago Booth MBAs, of which 57% said their startups were still in operation. MIT Sloan saw 89% of companies still operating, followed by Stanford at 81%, and HBS at 64%.
Anyone interested in further detail on the FT’s survey results can find them published here.
If you are pursuing an MBA and an entrepreneurial career path, our team at Transcend Admissions has deep experience in the world of entrepreneurship, and loves working with motivated self-starters who want to create value in the world. We welcome you to reach out to introduce yourself and discuss your goals with us at info@TranscendAdmissions.com.