California’s Berkeley-Haas School has said it will provide $100,000 in seed funding to help MBA students launch start-up ventures — highlighting the increasing amounts of support top business schools are dishing out to entrepreneurial students.
The Dean’s Startup Seed Fund will provide $5,000 grants to early-stage start-ups for prototype development and customer discovery activities.
Rich Lyons, dean of the business school, said Haas student entrepreneurs are thriving in the nearby Silicon Valley start-up ecosystem. He added that the initiative will create a “new generation of leaders” that can feed back into this entrepreneurial scene.
Haas is one of many leading schools providing start-up cash for MBAs, who increasingly see their futures in entrepreneurial ventures rather than corporate entities.
Caroline Daniels, senior lecturer in entrepreneurship at Babson College, said that MBA students “feel more confident” to launch start-ups while in business school, which “mitigates the risk” of failure.
Lara Berkowitz, executive director of the Career Centre at London Business School, said: “It’s not just about going into a big multinational corporation anymore.”
Spain’s ESADE Business School last year doubled the amount of funding given to student ventures through its alumni association, to €4 million. Over the past three years, the network has pumped €15 million in 56 companies.
Michigan’s Ross School said in July that it had channelled $4.4 million in start-up funding to students, including through three student-led venture capital funds. It also announced a new $10 million fund to support more student ventures.
And Carnegie Mellon in June said it would set aside $8 million from a $31 million donation, from the founder of VC firm Accel Partners, for seed funding and other support for students.
The announced funds build on the momentous amounts of VC funding that have been poured into start-up companies launched at business schools in recent years.
The total raised among the top-25 business schools reached $62.8 billion, according to recent data from PitchBook, a research firm, led by Harvard, Stanford GSB, and Wharton School.
More than 200 entrepreneurs from Kellogg School have raised $2.7 billion for 194 start-up companies, while at Chicago’s Booth School, 166 MBAs have raised $1.5 billion in VC funding for 151 companies.
Examples include BlaBlaCar, a French ridesharing start-up of the business school INSEAD, which last month raised $200 million based on a valuation of €1.4 billion, and Rocket Internet, the German e-commerce incubator that is listed in Berlin, of MIT Sloan School.
The funds at Haas are part of a broader package of support for students announced by the school on Monday. A new umbrella organization — the Berkeley-Haas Entrepreneurship Program — will provide support including mentorship programs and a new industry specialist in the Career Management Group who will advise students interested in working at start-ups.
The number of MBAs in particular seeking out usually lower-paying jobs at little-known start-ups has surged recently.
Ted Zoller, director for the Centre for Entrepreneurial Studies at UNC Kenan-Flagler Business School, said: “Students seek a dynamic, fast-paced and cutting-edge business experience, and entrepreneurial ventures clearly fit the bill.”
Katharine Boshkoff, VP of global career development for Hult International Business School, said that Hult’s students are well-trained to meet common start-up needs, adding: “We have seen a significant jump in our graduates’ participation in start-ups.”