The Rise and Fall of the College Dropout in Startup Culture

Although legendary entrepreneurs like Steve Jobs, Bill Gates, and Mark Zuckerberg famously dropped out of college, research indicates that most successful startup founders typically hold bachelor's or advanced degrees. Despite this, the appeal of being a dropout still captures the imagination of many aspiring entrepreneurs and investors.

Current Trends in the Startup Ecosystem

This sentiment seems particularly prominent during events like Y Combinator Demo Days, where founders often emphasize their dropout status in brief pitches. Katie Jacobs Stanton, founder and general partner at Moxxie Ventures, notes, “Being a dropout is a credential in itself, signaling deep conviction and commitment. It’s seen as positive within the venture community.”

Educational Attainment Among AI Entrepreneurs

While many young AI entrepreneurs are highly ambitious, most still choose to complete their degrees. For example, Michael Truell, CEO of Cursor, earned his degree from MIT, and Scott Wu, co-founder of Cognition, graduated from Harvard. However, some entrepreneurs, such as Brendan Foody, who co-founded Mercor after leaving Georgetown University, believe that staying in school might cause them to miss critical windows for startup development.

The Urgency and FOMO in Startup Founding

Kulveer Taggar of Phosphor Capital highlights a pervasive sense of urgency and fear of missing out (FOMO) among young entrepreneurs. “There’s a real trade-off: finish your degree or start building now,” he explains. This pressure sometimes leads students to make drastic decisions, such as leaving university in their final semester, convinced that holding a diploma might hinder their chances of funding.

Perceptions Among Investors

While some founders worry that a diploma may negatively influence investors, Yuri Sagalov of General Catalyst suggests otherwise, especially for students near graduation. “For those in their fourth year, I haven’t observed much difference whether someone graduates or drops out,” he says. Sagalov also emphasizes the importance of the social network and brand associated with universities, which can still provide value regardless of whether the degree is earned.

Debate: Dropouts vs. Graduates

Though many investors see potential in founders who are willing to forgo degrees, some, like Wesley Chan of FPV Ventures, prefer more seasoned entrepreneurs. Chan argues that wisdom, often gained through experience and scars, is a crucial trait that typically matures with age and may give older founders an advantage.

Final Thoughts

The narrative around dropping out to pursue startups remains complex. While some view it as a badge of conviction, others value the social capital, networks, and experience gained through formal education. As the startup landscape continues to evolve, the decision to stay or leave school remains a deeply personal and strategic choice for many entrepreneurs.

This article was written by Marina Temkin, a VC and startups reporter at TechCrunch.