A Stanford team found that startup founders tied to the University of Cincinnati and the University of Utah were more likely to reach a valuation of a billion dollars or more, or unicorn status, with their startups. According to the report, these schools are more likely than Ivy League universities to produce a unicorn.
Ilya Strebulaev, David S. Lobel professor of private equity and finance professor at the Stanford University Graduate School of Business, revealed that US startup founders who studied or worked at the University of Cincinnati had 3.3 times more likely to start a unicorn than average. Strebulaev’s workplace, Stanford, was 1.6 times the average for comparison.
General view of the University of Cincinnati campus. Photo by Michael Hickey/Getty Images
“We started by identifying the educational and professional backgrounds of the founders of 1,110 US-based VC-backed unicorns and 1,028 randomly selected VC-backed companies,” Strebulaev wrote in a LinkedIn post. Of that group, 1,081 unicorns and 961 random sample startups had at least one founder associated with a university.
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The team at the Stanford University Graduate School of Business Venture Capital Initiative, founded by Strebulaev, then looked at which universities tied to unicorns and which were in the random sample group to determine which were most likely to tie up with unicorn founders. .
The University of Cincinnati, for example, was linked to 1% of the 1,081 unicorns the team examined and 0.3% of the 961 startups in the random sample. Dividing these two percentages gives you 3.3, or, in Strebulaev’s words, “the odds ratio of producing a unicorn.”
The University of Utah had an odds ratio of 3.2; Yale and Vanderbilt follow with a ratio of 2.0. The University of California, Berkeley, came in at 1.5.
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The study’s findings contrast with the team’s previous work examining the same question. Three months ago, Strebulaev identified that Yale, Columbia and Stanford had the best odds ratios following the same methodology. The difference in the results could be caused by which companies were in the random selection group this time.
One notable unicorn from the University of Cincinnati is Astronomer, which surpassed a billion-dollar valuation in 2022. Ry Walker, the startup’s co-founder, recently served as an entrepreneur-in-residence at UC’s Venture Lab.
Here are the top 5 schools with the highest odds ratio of producing a unicorn:
- University of Cincinnati: 3.3 times more likely
- University of Utah — 3.2
- Yale and Vanderbilt-2.0
- Columbia, BYU and Stanford — 1.6
- The University of California, Berkeley – 1.5.
Click here for the full announcement of Strebulaev’s analysis.