While renowned figures such as Steve Jobs, Bill Gates, and Mark Zuckerberg are known for not completing their college education, various studies indicate that a significant number of thriving startups were established by founders with bachelor’s or higher degrees.
In spite of this information, the allure of a dropout founder remains strong, although VC interest in those without degrees fluctuates significantly. This trend experiences cycles of popularity, and at present, it is undeniably at the forefront of the AI surge.
The phenomenon is particularly noticeable during Y Combinator Demo Days, where an increasing number of founders emphasize their dropout histories during their one-minute presentations.
“I doubt YC formally monitors dropout statuses, but, based on recent batches, I was really struck by how many founders make a point of mentioning their dropout experiences from college, grad school, and even high school,” expressed Katie Jacobs Stanton, founder and general partner of Moxxie Ventures. “Being a dropout is in itself a type of credential, showcasing a strong belief and dedication to entrepreneurial efforts. In the venture ecosystem, it seems to be regarded positively.”
Even though many prominent founders within the AI sector are relatively young, the majority chose to complete their degrees. For example, Michael Truell, CEO of Cursor, earned his degree from MIT, and Cognition co-founder Scott Wu is a Harvard graduate.
Nevertheless, in spite of these instances, an increasing number of prospective entrepreneurs worry that waiting to graduate could mean losing a vital opportunity in the AI development phase. Individuals like Brendan Foody, who co-founded Mercor, have notably left prestigious institutions such as Georgetown to focus on their startups.
Kulveer Taggar, founder of the YC-centered venture firm Phosphor Capital, shared with TechCrunch: “There’s a palpable sense of urgency, maybe even FOMO.” It’s a calculation being made now: “I can either complete my degree, or I can dive straight into building.”
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This concern is leading to extreme situations. A professor from a prestigious university recently recounted a student who opted to leave his degree program in his final semester, firmly believing that having a diploma would actually diminish his chances of securing funding.
While numerous founders are anxious that a diploma may signal a lack of commitment, Yuri Sagalov, who oversees General Catalyst’s seed strategy, suggests that VCs are less focused on the dropout distinction, especially for students nearing graduation: “I don’t think I’ve ever viewed anyone differently for having graduated or not when they’re in [their] fourth year and decide to leave.”
Even though self-taught tech visionaries can establish startups without formal education, Sagalov contends that the social networking opportunities provided by a university, along with its brand reputation, hold value—even if the founder doesn’t earn a degree.
‘You gain much of the social value… because you can highlight your participation,’ Sagalov stated. “Most individuals will look you up on LinkedIn and are less concerned about whether you completed your degree.”
Although many investors currently believe that founders can successfully move forward without a university degree, not every VC agrees that younger founders hold a distinct advantage in this landscape.
Wesley Chan, co-founder of FPV Ventures, is not particularly keen on investing in dropouts, as he values a quality that most younger founders have yet to acquire: wisdom. Chan posits that wisdom is generally found in “older founders or individuals who have accumulated a few scars over time.”