MBA Students More Interested in Entrepreneurship and Venture Capital Than Ever Before

What pushes professionals to pursue an MBA? Which are the industries and sectors that candidates have in mind when applying for an MBA? How have student attitudes towards certain careers changed since before the COVID-19 pandemic?

The answers to these questions are crucial for b-schools around the world to offer MBA programs that are not only high-quality, but also competitive in the business education market.

According to a new study by venture firm Illuminate Ventures – which surveyed current MBA students and applicants to top b-schools, including the Yale School of Management, Chicago Booth and Tepper School of Business – entrepreneurship and venture capital are becoming the most popular career paths among MBAs.

Let’s take a look at the specifics to understand why this is important for business education.

Interest in entrepreneurship and venture capital on a roll

The survey results show that the interest in entrepreneurship and venture capital among MBA applicants and students skyrocketed between 2018 and the end of 2020.

In 2018, results from a similar GMAC study found that only 25 percent of MBAs were considering entrepreneurship as a desirable post-graduation career. Now, as we transition into 2021, over 80 percent of MBA students say they’re interested in entrepreneurship as a career path, and over 50 percent have a strong interest for venture capital.

This striking difference in interest shows how niche and non-corporate careers might replace more traditional paths – such as finance and consulting – in future as the organizations likely to attract the most MBA talent.

Ideas over money – but with influence

While a high ROI and six-figure salaries might seem like the most obvious motivations for undertaking an MBA program, research shows new values might soon take the lead.

In fact, the most selected reason for choosing entrepreneurship as the ideal career path among MBA candidates and students was, by far, to put into practice and bring into the market personal business ideas.

However, high levels of interest in entrepreneurship and venture capital don’t grow overnight or as an idea plucked from the sky: over half of the students who dream of pursuing a career in the field have either previously founded a business (23 percent) or worked in an early-stage company (36 percent). Moreover, 60 percent had an entrepreneur friend, and over two-thirds had an entrepreneur parent or mentor.

The coronavirus effect

Perhaps surprisingly, the COVID-19 pandemic increased student interest in entrepreneurship and venture capital despite the challenges the crisis posed to businesses and professionals worldwide. But why?

Experts believe the devastating effects of coronavirus on local communities and the job market in 2020 are stimulating applicants and MBAs more than ever to want to be their own bosses and not depend on corporate organizations to thrive.

The need for gender equality to break barriers

According to survey results, over half of respondents were interested in careers in venture capital – of those, 63 percent were men and 53 percent were women.

While both genders might share a common passion for this dynamic field, data shows that female MBA applicants, students, and graduates are less optimistic than men about their chances of kick-starting a venture capital career.

Similar results apply to entrepreneurship, with a higher percentage of female MBA students ranking “self-confidence” as a barrier to a career in the field. Nevertheless, financial security (58 percent) and access to start-up capital (37 percent) emerged as the most significant perceived barriers to entrepreneurial success for both genders.

The future of entrepreneurial learning

The results of this recent survey show that the MBA applicants and students of today are brimming with entrepreneurial ideas and already have a clear plan in mind for what they want to gain from a b-school degree, as well as about what they want their lives to look like after graduation.

However, and despite entrepreneurship already being a popular specialization at top b-schools, experts still recommend that higher education institutions take into account applicant and student attitudes to design MBA programs that would allow them to have the best chance of succeeding in the field, including implementing a fairer environment for diverse students.