From Netscape to Google, some of the most impactful technology companies in history were started at universities.
As barriers to entry continue to plummet and software slowly eats the world, organizations have been hard at work building the infrastructure for all things university entrepreneurship.
This report lays out lessons learned across 45+ campuses nationwide. We’ve surfaced these insights through a physical presence of 100+ Venture Partners on-the-ground, deep relationships with core faculty and administrators, and rigorous tracking.
Our analysis focuses not only on the quantity and success of high-growth, venture-backable technology companies, but also on trends within ecosystems.
But first, after a multi-month research process, we’re excited to share the top 15 US universities seeding great technology startups right now:
Numbers are important, but they’re not everything. To most accurately paint a portrait of the highest-quality university ecosystems, we combined both quantitative and qualitative factors. More detail on our methodology can be found in the second section of the report.
271 companies started since 2017
Known For: Google, Cisco, SoFi, DoorDash
Best in class: Raising money
If you’re a university entrepreneur, it’s tough to beat Stanford. It has it all: perhaps the best strategic location out of any university with Sand Hill Road on its doorstep, top-tier programs in nearly every field, and a decades-long entrepreneurial culture.
Programs like BASES, Cardinal Ventures, and StartX provide robust networks and easy access to top investors. Underappreciated in impact is Stanford’s leave of absence policy — students can leave for a full year without consequence. This dovetails well with their flexible curricula. Pairing access to high-quality resources with the freedom to work on anything predictably spawns interesting companies every year.
169 companies started since 2017
Known For: Dropbox, Akamai
Best in class: Hard-tech
Home to perhaps the world’s top technologists, MIT and Cambridge have been at the forefront of technology entrepreneurship since the industry’s inception in the late 1940s and early 1950s. Today, the university continues to have one of the strongest entrepreneurial ecosystems out there.
MIT is exceptional at removing red tape for entrepreneurs and fostering a student-driven hacker culture. MIT Sandbox gives founders up to $20k, no-strings-attached. Few schools are willing to give grants under such flexible circumstances — their trust in students helps define the overall spirit of entrepreneurship at MIT.
214 companies started since 2017
Known For: Apple, Lime
Under the radar until the last decade, UC Berkeley has quickly become well-known as a hotbed for university entrepreneurs, most recently serving as the launchpad for Lime. This is in no small part due to the rise of organizations like Berkeley SkyDeck, The House Fund, and the massive, tech-focused Berkeley alumni community who’ve rallied to support the ecosystem. The 214 venture-backed companies we tracked raised an average of $4.9M and a median of $2.0M, which signals a consistently high bar.
A recurring theme with similarly-ranked schools, Berkeley’s engineering programs are quite rigorous. At large-public-school scale, and when paired with student organizations such as CalHacks, the pool of talent is enormous and high-quality.
80 companies started since 2017
Known For: Warby Parker
Best in class: Direct-to-consumer startups
The birthplace of Warby Parker and the direct-to-consumer movement, Penn has become an entrepreneurial hotbed in recent years. Programs such as the Wharton Innovation Fund and Summer Venture Award let students turn down summer internships to work on their companies over the summer.
The Penn alumni network is exceptionally well-connected to the school and eager to help out young entrepreneurs. Even professors like Adam Grant actively invest in and support campus startups. This culture of giving back is a significant value-add to founders across all sectors. We expect this to continue at Wharton and Penn for many years ahead.
169 companies started since 2017
Known For: Microsoft, Facebook, Stitch Fix
Everyone knows the story of Mark Zuckerberg. But Harvard’s bread and butter in recent years has actually been in its graduate programs, particularly Harvard Business School (HBS). HBS continues to see a laundry list of unicorns emerge from it, though the most recent generation can trace its roots to Jennifer Hyman and Fleiss, who started Rent the Runway in 2009 while students. Stitch Fix and Blue Apron are also notable HBS winners.
Harvard has always had massive alumni backing, and has recently been aggressively building out on-campus institutions to support founders from day one. The i-lab is a relatively recent cross-department effort to fund and incubate dozens of startups each year. Students can even get class credit for building a company by taking ES95R.
29 companies started since 2017
Known For: GrubHub, Braintree
UChicago has transformed itself over the past decade. Chicago Booth has taken itself from a bastion of consulting and finance-types to one of the nation’s top entrepreneurship programs, generating companies like GrubHub and Braintree in the process. Similarly, it’s leveraged its status as a top research university (with organizations like Argonne National Laboratory steps away) and has begun leading the way to fund and commercialize the countless innovations, particularly around life sciences, coming out of the university.
As an example, the UChicago endowment has set aside $25M for the sole purpose of investing in Series A rounds of university-affiliated companies. This is a fairly unique and high-impact way to support founders trying to build lasting businesses instead of pet-startups. In addition to the annual New Venture Challenge, UChicago has done an excellent job of building substantial organizations without stifling the scrappy nature of many great companies.
97 companies started since 2017
Known For: Lyft
Best in class: Breadth
In addition to several highly-ranked engineering programs, Cornell uniquely has colleges dedicated to agriculture and hotel management. In fact, it was a School of Hotel Administration course that inspired John Zimmer (SHA ’06) to create Lyft. Students can easily take courses across Cornell’s seven colleges, leading to plenty of cross-collaboration opportunities between disciplines. Cornell Tech, an NYC-based campus focused specifically on graduate-level technology entrepreneurship, is doubling-down on this philosophy. The Roosevelt Island-based project is still in its early stages, but has spun out a number of promising ventures in its first handful of years.
53 companies started since 2017
Known For: FedEx, Justin.tv (Twitch), Genius
The diversity of tech entrepreneurship at Yale is what makes it so unique. While it’s known for its life sciences and healthtech innovation, in recent years there’s been an emergence of strong founders across the board, starting with Justin Kan and Emmett Shear (founding the company that ultimately became Twitch while undergraduates), to more recent successes like April Koh’s Spring Health, and Quantum Circuits, founded by three professors and pioneers in quantum computing.
At Yale, student-run organizations such as the Yale Helix Group, a health-tech incubator, do an excellent job of connecting ambitious builders with experienced collaborators in complex sectors. Events such as Startup Yale also help the university’s top-tier professional schools spin out cutting-edge legal and med-tech startups.
46 companies started since 2017
Known For: Box, Riot Games
Best in class: Media
USC is charging up the rankings, led by recent upstarts like Mira Labs. Its location in the heart of LA makes it a prime candidate for media tech companies, but it’s also had its fair share of others (Box, anyone?).
The one-of-a-kind Iovine and Young Academy represents perhaps the most exciting recent innovation in university entrepreneurship. The IYA is an interdisciplinary program focused on nurturing creativity at the intersection of design, engineering, and entrepreneurship. Students admitted to the highly-selective cohort take classes across every discipline relevant to starting a company. This structure completely disrupts the overly-academic and theoretical nature of other majors that students often treat as a thorn in their sides.
39 companies started since 2017
Known For: Red Hat, Duolingo
Best in class: Artificial intelligence, machine learning
Churning-out hard tech for decades, CMU is well-known worldwide for its engineering prowess. This continues to be the school’s strength, with robotics and AI/ML companies accounting for some of its more recent successes. One thing that CMU in particular should be commended for is its tech commercialization process. Compared to most universities, it’s relatively painless. This founder-friendly approach has helped spawn companies like Duolingo, and we think other universities would be wise to follow suit.
We combined data from several public and private sources. Having rigorously tracked campus startup activity since Contrary was founded in 2016, our internal database lists thousands of companies, including information about founding teams, backgrounds, and sectors.
To quantify the quality and activity at large university startup hubs, we aggregated public data sets containing information on total funding amounts, number of exits, and number of students/alumni building companies.
The startups had to fit the following criteria to be included in our analysis:
Founded by entrepreneurs graduating between 2017 and 2022
Affiliated with core undergraduate, full-time graduate programs, or faculty positions
Meets basic requirements of the venture capital model (no web design consultancies, for example)
Our data also helps to answer important practical questions such as:
Startup activity: how much money do companies raise from high-quality investors?
Ecosystem quality: what resources are available to founders?
History: how many high-impact exits originated from the school?
Freedom: can founders easily learn and collaborate across disciplines without red tape?
Diversity: how does the school promote unrecognized talent?
Each university is unique. However, as we’ve spent the past few years canvassing universities across the country, we’ve identified six characteristics of thriving entrepreneurial ecosystems.
Best in class: Northeastern University
Schools with extensive bureaucracies haven’t been nearly as successful. This is primarily a result of competing incentives and slow decision-making, which we detail below. We’ll admit it though — we can count on one hand the number of schools that have successfully pared back red tape.
In most cases, the schools that succeeded in streamlining have developed entrepreneurial ecosystems that are student-driven (bottom-up), rather than faculty-driven (top-down). Northeastern University and their Mosaic program are a prime example of this.
Most universities we work with are siloed, which makes collaboration nearly impossible. Because people don’t know who’s working on what, talent can’t be funneled in the appropriate direction and resources are either hidden or unevenly distributed.
Faculty and administrators often have few incentives to promote cross-campus entrepreneurship, and toxic relationships can sometimes result. It’s not uncommon to find departments within universities that develop their own incubators and programs. Ultimately, independent programs fail to foster interdisciplinary collaboration.
Schools must use caution, however, when creating additional programs or clubs attempting to unify disparate entrepreneurial activities on campus. These tend to complicate and bifurcate rather than simplify. Building strong common areas or student spaces instead can allow for organic culture creation.
Centralizing the ecosystem solves for this, and the top universities have found great success following this playbook.
This is equally valuable. On the plus side, students routinely create organizations to help augment and fill a void that they notice within the school’s ecosystem. But this also creates its own set of challenges.
To name just a few, competing organizations stretch instead of share resources, organizations are often unaffiliated and self-funded, and leadership voids sometimes arise when students graduate. While most administrators recognize this problem, we believe it is the biggest inhibitor to ecosystem development.
This one’s simple:
Build a great engineering program -> attract great technical talent -> build great companies.
Best in class: Duke University
Universities with thriving ecosystems have developed stable sources of capital for university- started companies. Being located in a city makes this easier. However, top schools outside of major cities have also built capital infrastructure, primarily by tapping alumni networks. Duke is a great example of this.
Idea-stage funding is vital for supporting university entrepreneurs and also serves as a democratization tool, allowing those who might not otherwise have had the financial resources an attempt at building their business.
Interesting and novel startups often originate as side projects hacked together by students in their free time. Leaving some room or optionality in curricula lets founders be more flexible and in control of their education.
Likewise, some of the most dedicated university founders are constantly engaged in a balancing act between school responsibilities and their companies. Pitch competitions, incubators, and other resource centers can mitigate this problem by removing red tape as mentioned above. But at the end of the day, coursework is the main focus of school, and curriculum policy is far more impactful than anything else when it comes to giving founders time and space to build.
This is something we deeply believe in, and we hope to do our part through backing ever-greater numbers of undiscovered talent, regardless of background.
On the flip-side, the 45+ universities that we visited are all doing their part, as well. They’re changing their messaging and are pouring resources into innovation-centric programs.
A phenomenal example of this is what USC is doing with the Iovine and Young Academy (IYA), as mentioned above in our report.
When you combine university efforts like the IYA with other school-focused programs like the Sequoia Ambassadors or firms like Contrary, you have a powerful recipe that will continue to crack the job-oriented culture and shift mindsets towards innovation and entrepreneurship.
Over time, as the ecosystem and culture grows, students and faculty can start to point to emerging entrepreneurial success stories. Those alumni who’ve recently started successful companies then come back to campus, either as speakers or mentors, and ultimately serve as role models. This is a critical ingredient, as it allows community members to begin asking themselves a formative question — “why not me?”
Of course, most schools won’t be able to point to university-started companies with market caps of $100B+, but that misses the point. With proper infrastructure in place, little wins begin to accumulate. Then culture develops. And from there, it’s off to the races.
The culture of entrepreneurship on university campuses has never been stronger. For perhaps the first time, the best and brightest are now actively considering entrepreneurship and tech as a viable career option, compared to traditional finance or consulting tracks.
We’re excited to see this secular trend and cultural shift continue for the long haul.
Copyright 2019 by Contrary Capital Management, LLC. All rights reserved.
This report does not serve as investment advice or offering of any securities, and should not be used in any investment decisions.
Content contains a mix of public and private information collected about currently enrolled, technology-focused entrepreneurs, as well as recent graduates and drop-outs no more than two years out of school.
Find us at contrarycap.com or at [email protected]