The Evolution of University Entrepreneurship
Over the last 7 years, the landscape of university entrepreneurship has transformed itself from the odd few elective entrepreneurial courses to dedicated accelerators and venture funds spinning out startups that have gone onto redefine entire sectors.
My transatlantic alma maters are cases in point. When I graduated from the LSE, there was no startup scene to speak of, we became bankers, lawyers or consultants. Today LSE Generate has created a host of programmes for students to gain early exposure to entrepreneurship as a career path. This includes a summer accelerator and multiple treks to startup hubs.
In 2012, a small group of us building businesses during our MBA co-founded Columbia University’s first incubator. The entrepreneurial programme has since grown rapidly to include accelerators specific to growing sub sectors such real estate tech, venture competitions and even a start-up festival.
Instilling an Entrepreneurial Mindset
Over the past two years, I conducted research across 25 cities entrepreneurial ecosystems through a Churchill Fellowship grant. I interviewed leading universities on the why entrepreneurship has been a strategic priority.
Rudolf Dömötör, managing director of the WU Entrepreneurship centre who launched Entrepreneurship Avenue emphasised entrepreneurship as a mindset not simply a curriculum “We need more entrepreneurial literacy – I would like to see that every student in touch with the idea of entrepreneurial thinking”
Even if students decide that starting a venture is not for them or the timing is not right at university, early exposure to entrepreneurship and the core traits that go in hand in hand with that has numerous benefits. Namely, resilience, adaptability and a few I didn’t anticipate as a graduate entrepreneur – the humility and courage from going to market with your idea. All are traits that equip students better for today’s work environment.
Why the most valuable companies will originate at universities
Where I see the most potential for student entrepreneurship is the intersection of entrepreneurial thinking with deep sector expertise be it in deep technology sectors or social science.
Two good examples of innovative models at this intersection are VentureKick in Switzerland which provides pre-seed capital to Swiss university spin offs and Demola, an in-university organisation that supports students co-create projects with companies.
“We manage the IP and the whole framework to make it easier for them” said Jose who I met at Y-Kampus, the center for innovation and entrepreneurship at the Tampere University of Applied Sciences.
Investors are also taking note with increasing pools of capital dedicated to student ventures. The US has a more developed strategy in this arena with two notable funds First Round and Rough Draft Ventures that have invested in over 200 student founded companies.
But some investors I have spoken to challenge this thesis on the grounds that universities have scaffolded student startups with punitive equity stakes and IP rules. In particular for specialist researchers with deep IP. “It disincentives follow on investments” said Oliver Huez a partner C4 ventures. But newer commercialisation models that correctly incentivise the student and benefit the university are helping to overcome this barrier.
“We considered staying in London to grow our business Rootnote but the visa process added too much uncertainty and risk”
Jason Burchard, an LSE Generate alumnus.
The International Graduate Entrepreneur Vs. The Visa
If we are to capture longer term economic benefits from university led startups, in addition to improved commercialisation models, immigration policies need to keep pace to allow the global university talent pool the time to commercialise and grow their ventures.
“We considered staying in London to grow our business Rootnote but the visa process added too much uncertainty and risk” said founder Jason Burchard, an LSE Generate alumnus.
His predicament represents a universal dilemma for international graduate entrepreneurs. Add more complexity to the already difficult task of growing a business or follow the path of least resistance and return home?
Universities expend significant effort to attract the best global talent and it would seem obvious to help retain that talent if they want to pursue. So why is it so tough?
I found that across ecosystems far better structural incentives were needed between academia and policymakers for immigration pathways for international graduate entrepreneurs. One model that addresses the broken incentive link is Global EIR in the US.
The program delivers economic opportunities locally – entrepreneurs make a service commitment to the university, to create jobs for the city and in turn, international applicants can see the Global EIR clear pathway for progression of their entpreneurial ambitions. Many of its core principles are transferable to UK universities.
The UK University Opportunity
In my research report, I highlighted start up friendly policies and university models launched across Europe as the race for startup talent intensifies. The UK recently responded by launching startup and innovation visas which replaces the current Tier 1 and Tier 2 system.
With the new visas, third party endorsers including universities are to play a greater role by vetting and also reserving the right to cancel start up visas. This presents both challenges and opportunities. Graduate entrepreneurs must be carefully assessed for commitment to their business and equally, the process should not be so punitive so as to put off promising startups.
It is not an easy balance to strike but investing in getting it right will pay long term dividends. One in 7 companies in the UK are started by immigrant entrepreneurs across 155 countries many of whom arrived in the UK originally as students.
As Brexit progresses, or not, British universities can maintain wider appeal by building on this legacy of entrepreneurial diversity. There is a clear opportunity to set the gold standard in how ambitious international student entrepreneurs are supported and with that the next wave of game-changing startups.