The successful college dropout is rare. The majority of startup executives have advanced degrees.

Research by Collin West and Gopinath Sundaramurthy56% of executives hold advanced degrees or fellowships. 70% of U.S. startups have at least one C-level person with an advanced degree.There’s an idea going around Silicon Valley that higher education doesn't matter if you want to start or climb the ranks of a startup. People point to the likes of Bill Gates and Mark Zuckerberg as successful college dropouts. But looking at the executive teams of the companies they founded—Microsoft and Facebook—we still see that they are filled with graduate degree holders. Facebook’s number two, Sheryl Sandberg, is a Harvard MBA and Nathan Myhrvoid, Microsoft’s first CTO, went to Princeton on a fellowship where he completed a master’s and a PhD.We at the Kauffman Fellows Research Center explored the link between education and startups using Crunchbase data to better understand these key drivers. Our analysis spanned 90,000 U.S. venture-backed startups, including 419,000 startup roles going as far back as 2001.Key Takeaways

• When looking at U.S. startup executives, the majority have pursued advanced degrees: 44% have a bachelor’s degree or below, while 56% have a master’s degree or above.
• Specific industries (healthcare) and roles (C-level executives) have pronounced differences. For example, as many as 67% of healthcare executives hold graduate degrees.

Hiring Executives and Getting to the C-SuiteWe begin by evaluating general executive employment. In our context, “executive” refers to directors, vice presidents, and C-level executives of an organization.

Figure 1. Degree type by executive role. Figure 2. Executive degree distribution by industry.As shown in Figure 1, 44% of startup executives have an undergraduate degree or lower, while 56% have an advanced degree. On the surface, startups appear to have a slight preference towards advanced degrees over four-year degrees.That said, there are noticeable differences when looking at specific industries (Figure 2, above). For example, in the healthcare industry, 67% of executives have advanced degrees, significantly higher than the 56% average from Figure 1. Figure 3 below shows that the majority of them hold degrees in business and science.

Figure 3. Executive distribution by degree, industry, and area of study.Looking at the data for companies that raised their first round between the years 2000 and 2018, Figure 4 below shows that graduate education has been important for quite some time. In 2000, 38% of C-suite executives (who we term “chiefs”) had an undergraduate degree or lower while 62% had advanced degrees.

Figure 4. Degree held by startup C-level executives by year of fundraising round.Although the percentage has been generally declining over the time period shown in Figure 4, 53% of startup C-level executives had advanced degrees in 2018, reflecting that a graduate education is still valued.Executives with Advanced Degrees Are More Common in the C-SuiteWe now shift to examine firms as a whole. For this discussion, C-level executives are people who hold titles such as CEO, COO, CFO, CTO, CIO, President, Owner, or Co-Owner.

Figure 5. Distribution of startups by education level of C-suite team. Figure 6. Distribution of startups by C-suite team education level and industry.Looking back at Figure 1, we know that 56% of startup executives have graduate degrees. Looking now at firms as a whole (Figure 5), we find that 70% of startups have at least one C-level person with an advanced degree.Figure 6 reveals distinct differences by industry. In healthcare, 79% of startups have at least one C-level person with an advanced degree, mirroring the higher percentages we saw for healthcare executives as a whole in Figure 2.“We are looking for domain expertise of founders in a sector and their particular view of the world,” shared Ashish Aggarwal, Kauffman Fellow and Principal at Grishin Robotics, a venture capital firm. This concentration of graduate- and fellowship-level education did not surprise him: Ashish noted that fields such as genomics, biotech, and advanced computer science all require sufficient depth of knowledge before starting a company.Conclusion and DiscussionThe data above supports the idea that companies continue to seek graduate-level education as part of the hiring evaluation process; therefore, graduate degree and fellowship holders may have a larger opportunity set of startups to join.Given that a lot of the language used in startups appears to de-value advanced education, we were surprised to find that startup executives are indeed highly educated, with 56% holding a graduate degree or fellowship (Figure 1). C-level executives are also highly educated as a group: 70% of startups have at least one C-level person with an advanced degree (Figure 5).To us, the answer is resounding. Advanced education still influences a startup executive’s job prospects—even in early-stage startups.Beyond technical and business skills, there are numerous other potential benefits to an advanced degree. Two that stand out to us are networking and peer learning, which may be even more impactful to a startup’s bottom line than the skills learned in classrooms. For example, those who attend top business schools may be more likely to be able to tap into venture capital networks.We will discuss this topic further in our second paper on education level, startups, and venture capital next week.

This research was funded by the Ewing Marion Kauffman Foundation. The contents of this publication are solely the responsibility of Grantee

MethodologyAll the data used in the development of these charts and insights were obtained from Crunchbase private-market data. Specifications of the analysis include the following:

• Venture rounds between 01 January 2000 and 31 December 2018 were included.
• Executives with titles including “ceo,” “cto,” “cfo,” “cio,” “chief,” “coo,” “cro,” “president,” “co-owner” and “cdo” (case insensitive) were marked as chiefs (or C-level executives).
• The start-group classification was based on the segment description listed in the dataset.
• College degrees were manually curated and classified based on the number of years and requirements for the degree. People with multiple degrees had those degrees ranked, and the top degree was selected.
• The classifications of degrees used in this study include the following:
• Undergraduate degree or less: includes classifications such as high school, certificate, diploma, bachelor’s 
• Graduate degree or higher: contains degrees such as MBA, master’s, doctorate/doctoral, physician, law degree, fellowships, and other graduate degrees.
• Education subjects, like degrees, were also manually curated and classified into large buckets like “Engineering,” “Business," “Science,” or “Other” based on subject type listed under each person’s education. Subjects for the top degrees for each person were used. A few examples are listed below:
• Engineering: computer engineering, chemical engineering, information technology, mechanical engineering
• Business: business, business administration, marketing, business management, international business, finance