VCs in New York (Gently) Tell MBAs Their Degrees Are UselessBy
New York isn’t a town known for sugarcoated rejections. But investors speaking at a conference hosted by Columbia Business School’s Private Equity $amp; Venture Capital Club were unfailingly polite in expressing the difficulty MBA candidates may face breaking into the world of technology startups.
“There’s been a lot in the blogosphere that says MBAs can’t start companies, bankers can’t start companies,” said Micah Rosenbloom, a partner at Founder Collective, during a panel on venture capital in New York. “It’s hard to paint any group or anybody with a broad brush.”
Roger Ehrenberg, managing partner of IA Ventures, said he is investing in a company started by a refugee from a major consulting firm. “One thing that I’ve found in our New York companies is the incredible diversity of our founders,” he said. “They’re way more diverse than our Bay Area companies.”
Stuart Ellman, managing partner at RRE Ventures, came the closest of any conference speaker to knocking the value of an MBA for entrepreneurs. “What’s becoming less important is academic credentialing,” he said. (Ellman teaches at Columbia Business School.) “We’re seeing more entrepreneurs dropping out of college, or not going to college, or going to colleges that weren’t considered Columbia-type schools.”
Contrast those remarks with comments made in February by Chamath Palihapitiya, founder of venture fund Social + Capital Partnership, at a conference organized by students at Harvard Business School. “It’s really unfair to you guys, but I think you’re discriminated against now,” he said of would-be entrepreneurs at HBS, according to the New York Times. “I would bet a large amount of money that the overwhelming majority of us would not look favorably on a company started by one of you.”
The overall tenor of today’s panel was that perseverance and force of personality (“awesomeness,” in the word of David Aronoff, general partner at Flybridge Capital Partners), are what investors are looking for in entrepreneurs.
That’s not new, of course: Many in the startup world have said that MBA programs don’t teach the skills entrepreneurs need. What stood out about the comments on the panel today was the gentleness of the let-down. That may be because New York doesn’t have as rich a history of producing technology companies as Silicon Valley, nor as many experienced founders or engineers. “One of the things we’ve had to do in New York, we’ve had to take an open perspective on this stuff,” said Rosenbloom, noting that he has an MBA and has been a startup founder.
It’s also not universally accepted that an MBA isn’t useful to entrepreneurs. “I use the analogy of basketball,” said Vincent Ponzo, director of the Eugene Lang Entrepereneurship Center at Columbia, in an interview. “If you’re LeBron James, you don’t need to go to college,” he says. “An MBA can be extremely helpful for someone with talent and hunger by giving them exposure to skills and people that will help them succeed.”
Rick Zullo, co-president of the student club that organized the event, said that being in New York offered advantages to students looking to break into venture capital. In addition to his studies, Zullo, who’s based in New York, said he’s working at Foundation Capital in Menlo Park, Calif. “We work during the day and do our best to be a part of things and go to class when we have to,” he said.
That may help. During a separate part of the conference, Peter Barris, a managing general partner based in Washington, D.C., for Menlo Park’s New Enterprise Associates, said his firm doesn’t have a formal recruitment process for MBAs and often hires people who have expertise honed in the workplace rather than at business school. “I’d seriously consider working at a startup,” he recommended. “You’ll learn lessons that are important to us, and that makes you more valuable.”