But it's the issue of "alumni leakage" that raises questions about
the effectiveness of the startup culture at Harvard and Penn, where
two thirds of entrepreneurs put down roots elsewhere.
"The 65% alumni leakage stat is ... alarming as Massachusetts
is consistently a top 2 or 3 market for VC deals and funding," the
authors wrote. In addition, a majority of startups emerging from
nearby MIT choose to stay in the Bay State, the report noted.
"For Penn, the retention of 35% is actually quite respectable given
that [Pennsylvania] is not a VC/angel investment
juggernaut as it is typically ranked 6th-9th in VC funding and deals
in our quarterly reports," the reports authors wrote.
The highest-profile example of that Harvard leakage is Facebook, the
brainchild of Harvard student Mark Zuckerberg, who quickly pulled up
stakes and moved to Silicon Valley to grow his business.
In some ways, this may not matter to the universities, which often
have equity stakes in many startups that slip from their
ivy-covered walls. Then again, universities surrounded by a healthy
community of their spawn benefit in many ways, not the least of
which is a by enjoying an employment funnel for new graduates.
More importantly, however, it matters tremendously to the cities,
counties and communities around the universities, where robust economic
development usually hinges on small businesses exploiting new
This notion is a small but key reason the Silicon Valley is what it
is today. The legendary Stanford engineering professor Fred Terman
was frustrated that, in the 1930s and 1940s, most Stanford graduates
were leaving California for the East Coast, where jobs in the
emerging electronics industry were. His idea
for the Stanford Industrial Center, an incubator (before
the word was used in this way), ultimately created a place where
graduates could stay and build businesses in the Santa Clara
The CB Insights study also suggests location isn't about the weather.
Seventy percent of startups from NYU stay in New York State; 60
percent of MIT startups stay in Massachusetts.
How would you fix the situation at Harvard and Penn?
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