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Which Universities produce the most founders?

23 July 2021

We recently spotted a post on Resume.io’s blog that used LinkedIn data to rank which US and UK universities have produced the most founders. That got us thinking about which universities in New Zealand and Australia stand out on this measure. In this article, entrepreneurship professor Rod McNaughton looks at the data.

Universities are increasingly a starting point for those wanting to set up a company or social venture. There is a good reason for this: universities can provide the ideas, networks, infrastructure, business knowledge, and support needed to start a business.

A 2019 survey of the University of Auckland alumni since 1940 found that 26% had founded a business and that the 5-year survival rate of their companies was more than twice the New Zealand average. Moreover, the proportion of alumni who founded their venture while studying, or within three years of graduating, rose sharply over the past decade.

We don’t know if these results are typical. Some universities are renowned for spawning businesses, and likely produce more founders than others. Entrepreneurial students may be drawn to universities with a reputation for entrepreneurship and the education and support systems to help them. But it is challenging to measure which universities produce the most founders.

Resume.io, recently published a study that used LinkedIn’s alumni search function to identify the US and UK universities that have the most founders among their alumni. Universities like Berkeley, Stanford and MIT in the US, and Cambridge and Oxford in the UK topped the list.

But, when the number of founders was expressed as a proportion of graduates, a different story emerged. In the US, the university with the highest density of founders among its alumni is Hult International Business School (16%), and in the UK, Regent’s University London (12.2%).

Using the same approach, Table 1 shows the number of founders from each New Zealand university, ranked along with the leading Group of Eight universities (Go8 – Australia’s leading research-intensive universities) in Australia for comparison.

Table 1 Alumni and founders for New Zealand universities and Australia’s Group of Eight Universities

		Founders	Alumni	Percentage of founders
1	University of Sydney	12949	218038	5.9
2	University of New South Wales	12648	229112	5.5
3	Monash University	12464	240166	5.2
4	University of Melbourne	12249	215269	5.7
5	University of Queensland	7754	169590	4.6
6	University of Auckland	6289	147328	4.3
7	University of Western Australia	4053	97631	4.2
8	University of Adelaide	3854	97651	3.9
9	Australian National University	3653	80606	4.5
10	Victoria University of Wellington	3410	81151	4.2
11	Auckland University of Technology	3258	86715	3.8
12	University of Otago	3121	71809	4.3
13	University of Canterbury	2721	63657	4.3
14	University of Waikato	1585	43423	3.7
15	Massey University	1045	22637	4.6
16	Lincoln University	840	22542	3.7

Obviously, the size of the alumni base matters for the number of founders. The University of Auckland has the sixth most founders, sitting comfortably within the Go8. However, the percentage of founders among alumni tells a different story. The range is relatively small, from 3.7% at Lincoln and Waikato to 5.9% at Sydney. Massey has the highest rate in New Zealand (4.6%) just slightly ahead of the University of Auckland (4.3%) which is tied with Otago and Canterbury. These rates are low compared to the top universities globally. Even Sydney falls outside of the top ten for the US (10th is Claremont at 12.4%) and the UK (10th is St. Andrews at 6.9%).

Using LinkedIn data to compare universities has weaknesses. Alumni choose to have a profile, and many don’t keep their profile updated or indicate they are a founder. LinkedIn data underestimates the number of founders and likely also underestimates the density of founders among alumni. In Resume.io’s study, for example, 12.9% of MIT’s alumni are founders, while MIT’s last alumni survey estimates that 25% of their graduates have started a business.

The problems with LinkedIn data likely affect all universities about the same, so may still be useful for comparing between them. Other studies have used LinkedIn’s alumni data to rank universities based on the proportion of CEOs among their alumni. The percentage of CEOs among the University of Auckland’s alumni is similar to that for founders at 4.4%, and there is likely overlap, given that many founders refer to themselves as “CEO & Founder”.

It also may be possible to detect the effect of some high-profile entrepreneurship activities on founders. The word “Velocity”, which is the name of the University of Auckland’s flagship extra-curricular entrepreneurship programme, appears in 27% of founders’ profiles since 2014, when the programme’s name was changed from “Spark”. While not all mentions will refer to this entrepreneurship programme, Velocity is a rare term in equivalent alumni profiles. For example, it only appears 18 times in the profiles of Otago alumni during the same period.

Care should be taken in drawing conclusions from these data. But it looks like universities in the region have a way to go yet, with no university in New Zealand or the Go8 really standing out for the density of founders among their alumni.

Rod McNaughton
Director Innovation and Professional Development
University of Auckland Business School

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