Small Business Startup News

MBAs Choosing Entrepreneurism Over Corporate Career Paths

Written by Tim Morral
Published: 5/30/2012

The number of Stanford Graduate School of Business grads becoming entrepreneurs reaches an all-time high.

Corporate executive or entrepreneur? It's a question every MBA program graduate has to answer and in the past, few MBAs elected to go the entrepreneurial route. But according to new numbers released by the Stanford Graduate School of Business (GSB), the decline in MBA entrepreneurs may be over.

MBA Entrepreneurs

For the past ten years, the number of GSB grads who have chosen an entrepreneurial career path has been steadily climbing. Approximately 16 percent of 2011 graduates opted to become entrepreneurs -- more than three times the number of MBA graduates who chose to become entrepreneurs in the early 1990s (5% per year) and an all-time high for Stanford GSB.

"Despite an uncertain economy, more of our students are willing to take the risk of starting up new enterprises to solve problems, address unmet needs and positively impact society," said Assistant Dean and Director of Stanford GSB's Career Management Center Pulin Sanghvi. "It is a sign of hopefulness and opportunity for the U.S. and the rest of the world."

The current generation of graduates has a preference for non-hierarchical business environments that feature risk-taking, collaborative learning and mentoring. If forced to choose, they also tend to opt for earlier leadership responsibilities rather than financial rewards and job security.

Trend data and the preferences of today's MBA graduates are leading some to believe that we are seeing a generational shift away from corporate career paths toward entrepreneurial career trajectories. In response, some corporate recruiters are adapting their approach, offering MBA grads more responsibility earlier in their career and touting other benefits designed to appeal to entrepreneurially minded professionals.

For MBA grads, it's important to know that if you intend to become an entrepreneur after your MBA the challenges and insecurities you face will be similar to those encountered by entrepreneurs who lack business school credentials. Funding concerns, income instability and fear of failure are just a few of the obstacles you will be forced to navigate.

But by entering the entrepreneurial arena as a MBA graduate, you will also have several advantages over the typical entrepreneur -- including important insights about strategy, finance, accounting, marketing, technology management and other disciplines that can make or break a small business.

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