University Ranking: Top 20 universities ranked by the median VC funding + other insights
University rankings typically focus on metrics like student-to-faculty ratios, academic performance, and international diversity. While these factors are important, they may not determine the success of university graduates as tech entrepreneurs. But this matters to cohorts as varied as VC investors, concerned parents, and even high-school students (like me).
There is only one relevant and well-known ranking Pitchbook Universities, based on the number of VC-backed founders among graduates and the total VC funding they raised. Yet its approach is far from ideal, as a few startups-outliers usually raise most of the funding within a university’s subset and strongly bias the related stats.
Runa Capital and I collaborated on creating a much better startup-related university ranking that’s based on typical (median) founder profiles, not skewed toward the best ones. We leveraged open data, formed the ranking, calculated stats, and now are excited to share a few cool insights.
How we prepared the ranking
We collected data about startups, founders, and their education from Crunchbase and enriched it using public LinkedIn profiles. For clarity, our research accounted only for the first higher education degrees (usually, bachelor’s) of founders, who launched their startups in 2007–2022 and raised at least $1 million in VC funding.
To avoid ambiguity and duplication, we considered standalone educational brands as part of their base universities — e.g. Harvard Business School as part of Harvard University. If a startup’s founders were from various universities, we assigned it to each university. Some institutions were excluded from the list because they lack startups founded by alumni or focus on graduate programs (most business schools).
University ranking based on VC funding
Our final dataset comprised over 17,000 founders from 89 universities, who launched 15,000 startups. It allowed us to identify top-20 universities by the median funding of related startups.
Pitchbook’s ranking places well-known US universities (Stanford, UC Berkeley, Harvard, UPenn, MIT) among the top 5. However, in our median-based ranking, Harvard was the only US institution to make the very top. In fact, the first four universities appear to be from Israel and India!
Notably, the number of VC-backed founders who have graduated from a university almost fails to correlate with the median VC funding of their startups. A striking example is UC Berkeley, which fell from second place in the Pitchbook’s ranking to 17th in ours.
The charts below clearly highlight this issue. Some universities have a few outliers where startups raised at least 100 times more than their median VC funding. While these notable stories help promote a university, it is hard to say if they are defined by its internal entrepreneurial culture.
At the end of the day, the extreme outliers Facebook and Microsoft were founded by drop-outs.
Connections to traditional university ratings
We explored the correlation between our ranking (based on median VC funding), Pitchbook Universities (founders count), and traditional QS World University Rankings (multi-factor score) and noticed a few cool details:
- QS and PitchBook rankings are correlated. Well-known top universities attract many talented students. Later, many of these converted into tech founders.
- QS and our rating are uncorrelated. Meaning that a university’s position in a well-known rating tells nothing about the ability of its typical (not the best one!) graduate to raise VC funding. Should median VC funding become a new QS factor in the future? :)
Going deeper: Pareto and Gini
During the research, we double-checked a well-known, but still fascinating fact — VC funding satisfies the Pareto principle. Based on our dataset, 17% of startups (they raised more than $100M) account for 83% of total funding.
Going deeper, we became curious about unequal VC funding distribution within universities’ alumni communities and used the Gini coefficient to compare them. In essence, it indicates how evenly values are distributed — e.g. 0 if all startups raised equal funding, 1 if one startup raised all the money.
Predictably, universities with high inequality of funding produce founders of leading startups (e.g. Open AI) among their alumni. For instance, such US leaders as Harvard and UC Berkeley have high Gini coefficients of 0.817 and 0.807, respectively.
However, it was surprising to see two of the best universities from our median-based rating towards the bottom of this analysis: Ben-Gurion University of the Negev and Bar-IIan University. It is hard to interpret why this is but perhaps the Israeli startup culture is very unique :)
Links Between Universities and Countries
Finally, I created an interactive graph that shows connections between universities whose alumni co-founded startups together, which helped us to explore the global university network:
- Universities that share at least 6 joint startups are connected to each other. The more they share, the stronger the connection.
- Unlike previous analysis, this graph accounts for more universities, all founders’ degrees, and startups founded in 2011–2022.
As the original picture was too focused on the US, I created one more graph with European universities. They are visually grouped by countries and red edges highlight international links.
It is clear from the graph that most startups are co-founded by people who studied in the same country. Their universities form local constellations, which in many countries, include a few big well-connected stars like Oxford and Cambridge in the UK.
Our data unsurprisingly shows startups are mostly created by people from the same university or the same country. However, there are nine schools out of over 100 where more than half of startups are co-founded by people who studied in different countries. The clear leaders by share of such international startups are INSEAD and IE Business School.
Conclusion
I hope you found these insights as exciting as I did, and that these results can help you navigate in the world of universities and VC. The preparation of this research was a profoundly significant experience for me, and I am extremely thankful to the Runa Capital team for their collaboration and for having me.
