Do Entrepreneurs Need to Go to College?

EDUCATION EXPERIENCE VS. IN THE STARTUP COMMUNITY It is an age-old question in the tech-startup community. Is it better to have a master's from a university or a master's from the College of Life? We take a look at how those with a master's degree stack up against alumni from prestigious startup accelerators such as Y Combinator and TechStars. FOUNDER'S DEGREE BREAKDOWN To many, the world of tech startups is filled with very young, inexperienced founders who made a company out of a college project. The truth is quite the opposite. A majority of founders have an undergrad degree or master's degree of some kind. 7% 45% MASTER'S LESS THEN UNDERGRAD 2% 46% PhD UNDERGRAD EDUCATION VS. EXPERIENCE FUNDING Funding across the board is almost identical, except in the case of founders with less than an undergraduate degree. AVERAGE FUNDING RAISED However, when it comes to funding, it seems that founders who went through the TechStars program, on average, are able to raise more money than those with a dual master's degree in 5*.... Š1.3 MILLION SI MILLION business or science. It would seem based on these national averages of funding, VCs favor founders that rely less on degrees and more on experience. ....... ........... O.... UNDERGRAD DEGREE MS MBA >UNDERGRAD FOUNDER WITH MBA & MS EDUCATION VS. EXPERIENCE When it comes to the rate of success, TechStars and FAILURE Y Combinator are able to give their alumni an extra leg up. FAILURE RATES AND UNEMPLOYMENT RATES When it comes to the failure rate of a tech startup, 22.2% TechStars and Y Combinator outstrip those who do not enter the program. Nationally the first year failure rate for those in the technology industry is around 40%. For TechStars that number is only 6.5%. Y Combinator has a 40% COMBINATOR FAILURE RATE FIRST YEAR STARTUP FAILURE RATE slightly higher failure rate at 22%. 6.5% TECHSTARS FAILURE RATE 8.4% 4.4% NATIONAL UNEMPLOYMENT GRADUATE DEGREE UNEMPLOYMENT EDUCATION VS. EXPERIENCE ALUMNI Below are a few of the startup scene's biggest stars and what type of education they received. EDUCATION Te GO eBea SERGEY BRIN JERRY YANG DAVID FILO MARK PINCUS SERGEY BRIN GOOGLE, CO -FOUNDER YAHOO, CO -FOUNDER YAHOO, CO -FOUNDER ZYNGA, FOUNDER LINKEDIN, CO -FOUNDER EDUCATION EDUCATION EDUCATION B.S. UNIVERSITY OF MARYLAND EDUCATION EDUCATION B.S. STANFORD UNIVERSITY B.S. TULANE UNIVERSITY M.S. STANFORD UNIVERSITY M.S. STANFORD UNIVERSITY M.S. STANFORD UNIVERSITY M.B.A. HARVARD B.S. STANFORD UNIVERSITY MA. OXFORD UNIVERSITY EXPERIENCE MIKE LEWIS SACHIN AGARWEL STEVE HUFFMAN DREW HOUSTON TRIP ALDER KAPOST, FOUNDER POSTEROUS, FOUNDER REDDIT, CO -FOUNDER DROPBOX, CO -FOUNDER SCRIBD, CO -FOUNDER EDUCATION EDUCATION B.S. NEW YORK UNIVERSITY EDUCATION EDUCATION EDUCATION B.S. DARTMOUTH COLLEGE B.S. UNIVERSITY OF VIRGINIA B.S. MIT TECHSTARS 2010 Y COMBINATOR 2008 Y COMBINATOR 2005 Y COMBINATOR 2007 Y COMBINATOR 2006 JUHO-PEKKA VIROLAINEN BRIAN CHESKY SAM HERBERT TOM CHIKOORE ARRON KALLENBERG BRIGHTKITE FOUNDER AIRBNB, CO-FOUNDER ADSTRUC, CO -FOUNDER FILTRBOX, CEO VILLIJ, CO -FOUNDER EDUCATION EDUCATION EDUCATION B.A. RISD EDUCATION EDUCATION B.S. DARTMOUTH COLLEGE B.S. UNIVERSITY OF VIRGINIA M.B.A. TECHSTARS 2007 Y COMBINATOR 2010 TECHSTARS 2010 TECHSTARS 2007 TECHSTARS 2007 A CLOSER LOOK In addition to TechStars and Y Combinator's impressive roster of alumni they product an equally impressive number of successful businesses. TECHSTARS HAS CREATED 92 COMPANIES SINCE 2007. Taking a closer look at TechStars success rate we can see that COMPANIES ARE 79 STILL ACTIVE. 85% of their alumni still have active startup ventures. This is largely due to a combination of 7 COMPANIES WERE LATER ACQUIRED. education received at TechStars and h COMPANIES FAILED. connections made within the industry. "Data as of 2011 48 COMPANIES WERE ABLE TO RECEIVE FUNDING. SUCCESS RATE: 05% OJ/0 Y COMBINATOR HAS CREATED 144 COMPANIES SINCE 2005. COMPANIES ARE 82 STILL ACTIVE. Y Combinator has certainly graduated some impressive alumni. Many accredit I 14 COMPANIES WERE LATER ACQUIRED. their success to their 9 COMPANIES ARE IN STEALTH MODE new model of startup funding. They allow startups 3 months for development and then invite investors during Demo Days to see the COMPANY MERGED progress of the startup. COMPANY HAD A PRIVATE INVESTOR BUY YC'S STAKE COMPANIES CLOSED 25 AFTER LAUNCH. "Data as of 2010 17 COMPANIES FAILED TO LAUNCH. 15 COMPANIES HAVE UNKNOWN STATUS 24 COMPANIES WERE ABLE TO RECEIVE FUNDING. SUCCESS RATE: 57% 100 SOURCES: Pulse2.com l ArcticeStarup.com I KinkaBink.com I TechStars.com I SmallBizTrends.coml YCombinator.com I CrunchBase.com I TechCrunch.com I BLS.gov I CBInsights.comI Gist. PhotoSource: Crunchbase.com $4.3 MILLION $2.2 MILLION $2.5 MILLION TECHSTARS $2.8 MILLION DEGREE FOUNDER WITH FOUNDER WITH