Harvard may be the No. 1 dream school for every over-achieving tiger parent, but if they want their babies to grow up to be wildly successful entrepreneurs, they might want to shift their focus west.
A new study by New York-based research firm CB Insights tracked the money raised and deals closed by the entrepreneurial alumni of six top universities, and found that graduates of Stanford, in Palo Alto, CA, dominate in terms of the amount of venture capital funding raised and deals closed.
Granted, Harvard came in at a close number two, but that’s only when you factor in Facebook (because CB Insights researchers included dropouts). Remove the Mark Zuckerberg effect, and the gap widens significantly between Stanford and the other five.
In another blow to the East Coast, MIT ranked last of the six universities in terms of dollars raised—behind not only Stanford and Harvard, but the University of California at Berkeley, New York University, and the University of Pennsylvania.
Those findings contrast with a study released last year by MIT’s Martin Trust Center for MIT Entrepreneurship, which determined that as of 2006, there were 25,600 companies founded by MIT alumni who are still alive, bringing in total annual revenues of some $2 trillion. A similar Stanford study released last week found that companies formed by its alumni generate $2.7 trillion in global revenues annually.
MIT Professor Edward Roberts, founder of the Martin Trust Center and co-author of the MIT report, said he did not understand the reliability of the CB Insights study.
“There are very careful studies (that) demonstrate that Stanford and MIT are very close to each other on all counts, and outshine the rest of the country by far,” Roberts said. “Why do we care about who receives VC funding? That is not impact—that is input. The outputs are surviving firms, the jobs they create, and the revenues they generate.”
All in all, alumni of the six universities have raised $12.6 billion in 559 financial transactions, according to the CB Insights report. But the West Coast institutions also bested their New England peers when it comes to keeping those dollars close to home. The report said that 85 percent of the money raised by Stanford alumni stayed in California, as did 88 percent of the UC-Berkeley dollars. But Harvard alumni kept only 27 percent of their money in Massachusetts, while the MIT retention rate was 28 percent.
The top venture capital investors vary from school to school but overall, Draper Fisher Jurvetson and Venrock participated in the most deals, the report found.
The total number of dollars raised per university:
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This is what the results look like when Facebook is removed:
