When College Degrees Influence Venture Capital Investing
There is an unwritten rule about the hiring process on Wall Street as it relates to applicants interested in investment banking careers: If your parents are major clients of the firm you are interviewing at, you will get the job. If your uncle, for example, is an attorney who routinely gets Wall Street firms out of trouble, you will at least get an analyst internship. This is the way things have been since the 20th century, and they are unlikely to change in the near future.
Let’s say you do not have the benefit of familial bonds to get into Wall Street, but you do have a degree in finance; in this case, hiring statistics indicate that recruiters have a certain preference for applicants who have graduated from the following institutions:
* New York University
* University of Michigan at Ann Arbor
* University of Pennsylvania
Over the last few decades, the list of feeder colleges that Wall Street firms recruit from has expanded considerably, and this has a lot to do with the way degree programs are managed. Some schools are better than others in terms of establishing recruitment relationships with investment banking firms. If the dean of a college wants to boost the profile of its economics department, forging ties with Wall Street would be a good move.
Similar to the statistics above, there are certain trends that have emerged surrounding college graduates who end up working at venture capital investment firms or becoming entrepreneurs, and there is an interesting correlation in this regard: It so happens that entrepreneurs who graduate from certain universities are more likely to get VC funding compared to other schools. This is the type of info you’ll find on a regular basis on PitchBook, a highly respected market research and business intelligence firm.
Most entrepreneurs who are able to secure VC funding these days are graduates from Stanford University; they are followed by alumni from the University of California Berkeley and the Massachusetts Institute of Technology. There is a clear common denominator that can explain this funding trend: These three schools are known for their cutting-edge technology programs.
When you look at the startup companies that routinely make headlines and get the attention of investors, you can see that most of them operate in the technology innovation field, which happens to be one of the most attractive for VC firms. This trend does not guarantee success, but it seems as if VC investors can’t get enough from this kind of startup.
In the near future, we will probably see a stronger focus on biotechnology and pharmaceutical startup companies, and this will likely change the list of schools graduating entrepreneurs that are more attractive to investors. The University of Texas Austin, for example, will likely be more toward the top of the list, and this trend may also extend to health sciences schools based in and around Boston. This future interest in biotech and healthcare startups can be gleaned from the need for vital solutions such as vaccines that can effectively mitigate the devastating effects of the coronavirus pandemic.