While iconic founders like Steve Jobs, Bill Gates and Mark Zuckerberg famously didn’t graduate from college, numerous studies show that the overwhelming majority of successful startups had at least one founder who did.
Yet despite this data, the allure of a dropout founder persists, even as VCs’ interest in the ‘un-degreed’ ebbs and flows. It tends to go in and out of style, and it is absolutely in vogue now during the AI craze.
It’s a trend that seems to have accelerated recently, with more founders telling the judges they’ve dropped out in their one-minute pitch at Y Combinator Demo Days.
“I don’t think YC officially tracks dropout status, but anecdotally in recent batches I was struck by how many founders would point to being a college or grad school or even high-school dropout,” said Katie Jacobs Stanton, founder and general partner of Moxxie Ventures. “To be a dropout is, in certain ways, a form of credentialing, indicating an intense devotion and dedication to building. I don’t think it’s being seen as negative in the venture ecosystem at all.”
While many of the leading founders in this wave of A.I. are young, most have decided to stick around and earn their diplomas. For example, Cursor CEO Michael Truell is an MIT grad, and Cognition co-founder Scott Wu graduated from Harvard.
But despite these anecdotes, a growing number of would-be entrepreneurs are afraid that remaining to graduate is simply missing the optimal window for AI development. Others, such as Brendan Foody, a co-founder of Mercor, have become famous for dropping out of top schools like Georgetown to work on their startups.
“There’s just this sense of urgency and maybe FOMO,” Kulveer Taggar, who launched the YC-focused venture firm Phosphor Capital, shared his thoughts with TechCrunch. Right now, there’s a calculation, he said: “I can finish my degree, or I can just start building.”
This fear, in turn, is causing extreme anecdotes. One professor at an elite university recently wrote about a student who was walking out on his degree in the final few years. That student was convinced that having a degree would hurt, rather than help, his chances of being funded.
And though some are worried their diploma could be a negative signal, Yuri Sagalov, who is in charge of General Catalyst’s seed strategy, said VCs don’t seem to fixate on the dropout label and that it might not matter as much for students who are nearly graduated: “I don’t think I’ve ever felt any different about someone who graduated or didn’t graduate when they’re in [their] fourth year and drop out.”
While self-taught tech prodigies can certainly build startups without going to college, Sagalov thinks there’s value in the social network a university creates and in its brand (even if the founder doesn’t actually graduate).
“You get a lot of the social value … because you can put that you were one of the participants,” Sagalov said. “Many folks are going to look you up on LinkedIn and will not care as much if you completed or not.”
Although it’s become en vogue among many investors to say a university degree isn’t necessary now that founders can start startups so young, not all VCs believe that a founding team’s age gives it an advantage in the market.
Wesley Chan, a founding partner at the venture capital firm FPV Ventures, is not as eager to invest in dropouts because he values what most young founders have yet to acquire: wisdom. Chan thinks wisdom is usually found in “those older founders or just people who have a couple of scars on their belt.”
