Venture capitalist Fred Wilson once estimated that a shade over 30 percent of his portfolio companies have founders who did not graduate from college.
He explained three reasons for this. The entrepreneur either grew up in a place where college attendance was not commonplace, they had no patience to endure four years of education they didn’t deem relevant, or they were too busy starting companies to finish school.
To boot, an entrepreneur – unlike a doctor or lawyer – doesn’t need a degree. Their credentials lie in their track record. Wilson argues that a successful first startup is “much better than a college degree” and even if it fails, the entrepreneur has shown “they can start something from nothing, build a team, a product, and maybe even a business.”
Yet his point isn’t that education isn’t important, it is. But that one does not have to go to school to be educated.
This is what Peter Thiel believes. Through the Thiel Fellowship, he encourages those under 20 to forfeit college by giving them $100,000 to pursue other work. They could choose to create a startup, perform scientific research, or work on a social cause.
One recipient is social entrepreneur Eden Full, whose creation SunSaluter increases electricity production using automatically rotating solar panels. The device functions on water, doubling as a water filter by producing four litres of clean water per day.
Thiel, who himself is a college graduate, began the Thiel Fellowship to question the need for and efficacy of higher education amidst skyrocketing tuition. For an entrepreneur whose path to higher education may seem like wasted years, the Thiel Fellowship offers an alternate course.
The radical idea met a fair share of critics. Observers believe the Fellowship sends the wrong message about education and undermines its importance. The fact is that only once every decade or two that a Bill Gates or Mark Zuckerberg drops out of college and goes on to become billionaires. On the other side of this tug of war are supporters who see the success achieved by social entrepreneurs like Full, believing that one can very well do without institutional education.
“I was really immature in college,” says Full in the Princeton Alumni Weekly. “I spent lots of time rowing and hanging out. I definitely didn’t spend a lot of time on my work. I almost felt that I had to go through college for the sake of going through college.”
Full hasn’t written off the idea of pursing a degree. The Calgary native currently studies mechanical engineering at Princeton and took some time off to do the two-year Thiel Fellowship she had be awarded during her sophomore year.
“Now I can go back to Princeton not feeling like I have unfinished business in the real world. I already know what I want to do because I took time to explore.”
Higher education institutions are trying to keep up with social entrepreneurs. This year, the Sandermoen School of Business became Canada’s first business school to offer an MBA and Executive MBA in Social Enterprise Leadership. And if one were to pursue social entrepreneurship education at an academic institution, there are plenty of other choices around the world.
But realistically speaking, how valuable is the whole process of getting a post-graduate degree for a social entrepreneur?
“I would say that the majority who approach us do have a college degree,” says Jordan Feder, Principal at Impact First Investments (IFI), an Israel-based impact investing firm focusing on high tech social enterprises, adding that “If you look at our portfolio companies, Neurotech Solutions – that’s one that’s kind of up and running – was founded by an entrepreneur who did not go to college, and in my opinion one that’s becoming a success story.”
Neurotech Solutions started with pure socially-oriented investors when it was just an idea to help diagnose ADHD for children and adults in a cost efficient and timely manner. As a result of this patient capital, traditional investors joined down the road. “The company now has a 12 percent market share in Israel and is filing for FDA approval,” says Feder.
Israel is a country with one of the highest proportion of college-educated adults, so it’s not uncommon that entrepreneurs come to IFI with a degree. Despite this, Feder says there are more important criteria that a social entrepreneur should have when IFI screens investees. “A major thing that we’re looking for at the beginning is what is the entrepreneur’s motivation? In a lot of respects, an entrepreneur that comes to us knows the problem first-hand, either from him/herself or someone in the family, and is looking to solve a social problem on a larger scale.”
IFI has screened over 200 companies, looking for innovative products and abilities to scale. Much like the venture capital world, some investees have gone through an educational route, while a select group have never stepped foot on college campus. What they both have, though, is having figured out the daily grind of what it takes to be a social entrepreneur – and getting funded.
“I do think you need the right kinds of investors around the table and the right kinds of people to help spearhead a company,” says Feder.
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