‘Leaving college early’ is now seen as the most desirable qualification for startup founders

The Real Story Behind Dropout Founders and Startup Success

While legendary entrepreneurs such as Steve Jobs, Bill Gates, and Mark Zuckerberg are often celebrated for leaving college early, research consistently indicates that most thriving startups are actually led by individuals who have earned at least a bachelor’s or advanced degree. Academic studies and industry reports reveal that the majority of successful founders hold formal educational qualifications.

Despite these findings, the narrative of the college dropout entrepreneur remains compelling, and investor interest in founders without degrees tends to ebb and flow. Currently, this trend is resurging, especially with the rapid advancements in artificial intelligence.

This renewed fascination is particularly noticeable at Y Combinator Demo Days, where more founders are highlighting their decision to leave school in their short presentations.

“Although Y Combinator doesn’t officially track dropout rates, I’ve noticed a growing number of founders proudly mentioning their dropout status from college, graduate programs, or even high school,” observed Katie Jacobs Stanton, founder and general partner at Moxxie Ventures. “Dropping out has become a badge of honor, signaling strong conviction and dedication to building something new. Within the venture capital community, this is often seen as a positive trait.”

Still, many of the prominent leaders in the AI sector have chosen to complete their degrees. For example, Michael Truell, CEO of Cursor, is an MIT graduate, and Scott Wu, co-founder of Cognition, holds a degree from Harvard.

Nevertheless, a growing number of would-be founders worry that staying in school could mean missing out on the most opportune moment to launch an AI startup. Some, like Brendan Foody—who left Georgetown to co-found Mercor—have made headlines for abandoning prestigious academic paths to pursue entrepreneurship.

“There’s a palpable sense of urgency and even FOMO right now,” said Kulveer Taggar, founder of Phosphor Capital, a venture firm focused on Y Combinator startups. “Many are weighing whether to finish their degree or dive straight into building their company.”

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This sense of urgency has led to extreme decisions. One professor at a top university recently recounted a student who left school just before graduation, convinced that holding a diploma would actually reduce his chances of securing investment.

While some believe that having a degree could be a disadvantage, Yuri Sagalov, who oversees seed investments at General Catalyst, argues that investors are not overly concerned about whether a founder graduates, especially if they are close to finishing their studies. “I’ve never felt differently about someone who left in their final year versus someone who graduated,” he explained.

Sagalov also points out that even for self-taught tech founders, the connections and reputation gained from attending a university can be valuable, regardless of whether they complete their degree.

“You still benefit from the social network and can list your participation,” Sagalov noted. “Most people will check your LinkedIn and won’t pay much attention to whether you actually graduated.”

Although many investors are now open to backing founders without formal degrees, not everyone in venture capital believes that youth is an advantage in today’s market.

Wesley Chan, co-founder of FPV Ventures, is more cautious about investing in dropouts. He emphasizes the importance of wisdom—a quality he believes is more common among older founders or those who have already faced significant challenges.