Start-ups and new ventures are becoming increasingly popular career paths for MBAs with a new survey showing about 85% of students are considering a career in entrepreneurship when they complete their studies.
A new study by venture capital firm Illuminate Ventures surveyed 500 business school students at 22 US-based business schools, including Yale School of Management and the University of Chicago Booth School of Business, in the first half of 2020.
Over 85% of respondents indicated that entrepreneurship was something they were considering as a current or future career path. Men (88%) were slightly more likely than women (80%) to select this answer.
Strong historical MBA student interest in entrepreneurship is supported by figures from investment database PitchBook showing that entrepreneurs from just the top twenty-five MBA programs founded 9,450 companies (14% led by women) between 2006 and 2020, including 72 unicorns.
The high level of interest in entrepreneurship reflects the fact over half of the students surveyed have either previously founded a business (23%) or worked in an early-stage company (an additional 36%). Similarly, nearly 60% of the students have a friend who is an entrepreneur and over two-thirds have either a parent or mentor that is an entrepreneurial role model.
The top three motivations for becoming an entrepreneur were s bringing my ideas to market (53% of women, 42% of men), creating a long-lasting company (19% each of women and men) and running my own business (18% of women, 22% of men).
Nearly 40% more male students (48% versus 34%) said they were actively pursuing a project than their female peers. Roughly 60% of students interested in an entrepreneurial career path had an entrepreneur friend, and over two-thirds had a parent or mentor as a role model.
The research also revealed key differences between male and female attitudes toward entrepreneurship, including perceived confidence gaps, concern about the availability of funding, and barriers to their success.
How do students think about entrepreneurial barriers and success attributes?
The survey also asked the students about the barriers to entrepreneurial success. Across current and prior survey respondents, all agreed that the most important attribute of a successful entrepreneur is a combination of resilience and perseverance.
All but one of the groups surveyed also selected the ability to attract a great team as the second most important success attribute. This ranking is likely well-merited since data shows that 23% of startups fail because they lack the right team.
When considering barriers to entrepreneurial success, male and female MBAs both selected financial security (58%) as a very significant barrier, followed by access to startup capital (37%). These top two barriers paralleled those of both male and female founders in our prior research.
Female MBA students ranked “self-confidence” as a barrier to entrepreneurial success somewhat higher than the male students surveyed.
What level of interest exists and what barriers are perceived in a venture capital career?
Illuminate ventures also asked the survey group about their interest in a career in venture capital and found that while MBAs were interested in careers in venture capital – 63% of men, and 53% of women – they believed it is very hard to break into the space.
Roughly 75% of female students perceived a “high barrier to entry” and nearly 80% of male students. Historically, the odds of landing a VC role have been far worse for women and other diverse groups lacking the right networks.
Students believed the best way to gain exposure to VC was through an internship in the space, but few have access to these types of opportunities.
Research shows that even minimal exposure to VC networks substantially benefits men, but is less helpful for women.
The survey and report were created by Tepper MBA graduates Cara Giannandrea and Natalie Gerber and the founder and Managing Director of Illuminate Ventures Cindy Padnos.