Entrepreneurial Success Not Correlated to University Prestige

An analysis of the educational backgrounds of tech company founders has shown that an elite education  does not provide as much of an advantage as many expect. In fact the results seem to show that where one studies has no correlation to entrepreneurial success, as long as one actually does study.

The 628 U.S.-born tech founders [surveyed] received their education from 287 unique universities. Almost every major U.S. university was represented. The top ten institutions in this group accounted for only 19 percent of the entire sample. In other words, 81% of the tech company founders came from “regular” schools. […]

The average sales revenue of all startups in one of our samples was around $5.7 million, and these companies employed an average of forty-two workers. Startups established by tech founders with Ivy League degrees had average sales and employment of $6.7 million and fifty-five workers, respectively. The success of these two groups markedly contrasted with startups established by tech founders with only a high school degree. Those founders had average revenues and employees of $2.2 million and eighteen, respectively. […] In other words, it didn’t matter so much if you graduated from an Ivy. What made the greatest difference was having a higher degree.

Similar results were uncovered in an analysis of company founders from India and China.

The analysis also challenges the belief that entrepreneurs start their ventures fresh out of full-time education, with the following results shown for how long after graduation different graduates found their companies:

  • MBA graduates: 13-15 years
  • Computer Science/IT graduates:  13 years
  • Bachelor’s degree holders: 17 years
  • Applied science majors: 20 years
  • PhD holders: 21 years

The crux of the argument: “The Ivy-Leaguers may be able to get their buddies from [big-name VC firms] to return emails, but they aren’t going to be any more successful at building companies.”



One response to “Entrepreneurial Success Not Correlated to University Prestige”

  1. statmon

    Interesting look at the statistics, but seems to imply that regular schools get the lion’s share of things. Viewed inversely, 3.5% (10/287) of schools garnered 19% (a greater proportion, 5.42X) of the startups. This would imply that going to the top schools does increase odds of a successful startup (though I concede it may not be statistically relevant (p<0.05)). Of course, "statistics will confess to anything if you torture them long enough".