MBAs don’t found most billion dollar startups but they certainly build them

No fancy robe required.
No fancy robe required.
Image: Reuters/Brian Snyder
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When former Facebook employee and venture capitalist Chamath Palihapitiya, spoke to students at Harvard Business School on Feb. 9, he delivered this sobering news: ”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.”

This comes at a time when elite business schools are deliberately focusing more on entrepreneurship and technology in their curriculum, and more graduates than ever are heading to the tech sector instead of traditional refuges in finance and management consulting.

Palihapitiya is correct to some extent, as Fortune’s Dan Primack highlighted today. Of 39 startups valued at more than $1 billion (and founded since 2003), only 12 had an MBA among their co-founders.

But the good news for HBS grads is that even if MBAs don’t always found startups, they’re essential in building them into profitable companies. Eighty-two percent of the “unicorn” companies had either an MBA co-founder or an MBA on their top executive team, according to an analysis from Boston venture capitalist and HBS lecturer Jeff Bussgang and Juan Leung Li.

Bussgang argues that that trend is due to a more entrepreneurially-focused curriculum at top schools and is having the greatest impact on most recent graduates. It’s worth arguing that the growing reliance on MBAs represents a maturation of Silicon Valley’s attitude toward the business side of technology. Executives with MBAs like Sheryl Sandberg at Facebook and Ali Rowghani at Twitter were essential figures in growing their companies. And the highest paid executive at Google in 2012 was business lead Nikesh Arora, who has an MBA from Northeastern.