Stanford alumni are the most successful at fundraising for startups

By December 07, 2012 Drop a comment
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Alumni entrepreneurs from just six American universities received over $12 billion in funding in the last four years. These companies behave very differently based on industry sector and geographical location.

Universities are deemed prestigious based on a variety of factors, and a study called the we The University Entrepreneurship Report decided to take a closer look at entrepreneurs who come out of the top American universities. The study rates those universities based on alumni’s entrepreneurial behavior. CB Insights gathered data on six institutions whose graduates founded or led a company, and compared on how much funding they received. Altogether, these six received $12.6 billion across 559 financing deals. The report also tracked what sectors these companies were in within each university, and “alumni leakage.” This last term denotes the percentage of alumni that remained or startups that were founded within the area of their alma mater.

The majority of companies funded are on the tech and software sector

Stanford University Alumni received the most funding - $4.1 billion in 203 deals between 2007 and 2011. Harvard came in second with $3.8 billion in 112 deals if Facebook is included, but with alumni only their total comes to $1.8 billion. In third place with $1.3 billion in alumni funding is UC Berkeley in 90 deals, and following that are New York University, University of Pennsylvania, and Massachusetts Institute of Technology. Tech and software were overall the most common industry that these companies received funding for - it was the top performer for each university in funding deals and amounts (between 42 and 74 percent of deals, and 64 and 97 percent of funding dollars). Berkley alumni had the most funding for Energy and Industrial companies (47%). Healthcare is another successful sector for all those universities in terms of deal volume.

Companies keep local most often in California and New York

The California universities performed best at keeping their former students nearby. They are likely aided in this by their proximity to Silicon Valley, which has a very tech-centric funding ecosystem. 85 percent of Stanford graduates and 88 percent of UC Berkeley graduates set up their companies in the same state. NYU alumni often stay close as well - 70 percent of the companies they set up were in New York. MIT came in next at 59 percent of home state companies. Harvard and U Penn performed more weakly in this area - only 35 percent of their alumni companies were in Massachusetts and Pennsylvania respectively.

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