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MBA INSIDER: BEST SCHOOLS FOR ENTREPRENEURSHIP By Brian Hindo The Road Less Traveled - Part 1 While few MBAs choose to run their own businesses, entrepreneurial skills, as taught at these leading schools, are a key to success anywhere 
INTRODUCTION Meet Ryan Forrest, one of a new generation of MBA entrepreneurs. After working for several years in Detroit, where he managed a rail yard for CSX, Forrest headed for Los Angeles in 1999 to enroll in UCLA's Anderson School. In the late '90s -- the salad days of business education -- many a budding captain of industry turned to B-school in hopes of cooking up a business plan for an online startup, then connecting with a venture capitalist and striking it rich on the Net. Forrest, though bent on running his own business, had ideas that were less farfetched. That's probably why he's still able to call himself an entrepreneur in 2003, three years after a dot-com bust that chased so many speculators back into traditional, and more stable, corporate jobs. After graduating in 2001 -- just in time to face a labor market squeeze that affected MBAs of all stripes -- Forrest strung together independent consulting gigs to make ends meet, while keeping his eyes peeled for opportunities to buy his own company. After two years, he thought he had found the perfect opportunity -- in Southern California, where he wanted to stay, and for the right price of under $500,000. Forrest's once-in-a-lifetime opportunity wasn't the type of glitzy gig most people would associate with the glamorous West Coast. It had nothing to do with entertainment or a hot technology. In fact, Forrest wanted to buy a Malibu-based business that installs, empties, and replaces septic tanks. After nearly a year spent poring over tax returns and income statements, he shook hands on a deal last summer -- only to have the owner balk at the last minute and raise his asking price. Using the accounting and finance skills Anderson's MBA program had taught him, Forrest had diligently arrived at what he thought was a proper valuation -- and he felt comfortable walking away from the transaction. Still, "it was very depressing," Forrest says. "I had spent 10 months trying to complete that deal." Now, he's back on the lookout for a company of his own. Forrest's story isn't one that captures the imagination or that shows up in the glossy information brochures that B-schools typically distribute. But it more accurately reflects the realities of entrepreneurship after B-school than the popular image of a slick, well-funded technophile. As the Internet boom has fizzled, would-be entrepreneurs have had to turn to more prosaic pursuits, many of them financed with the help of family and friends, as in Forrest's case. Indeed, a recent study of 500 successful small companies by Columbia Business School professor Amar Bhide found that they had median startup capital of $10,000 -– not exactly a stash on which software fortunes are founded. Fewer than 5% of those got funding from venture capitalists or from their cousins, so-called angel investors. In part, that's because venture capitalists have become more cautious after being burned in the dot-com bust. A recent PricewaterhouseCoopers survey put venture capital-spending for the first quarter of 2003 at $4 billion, well below the record $28.6 billion in the first quarter of 2000. "The VC-backed model does [still] dominate in some fields, such as biotechnology and supercomputers, where startups have to invest significant capital before they realize any revenues," writes Bhide. Yet even in such cases, VCs today require a much more solid business plan than they did three years ago, for ideas that look much more like a sure thing. --------------------------------------------- The Top Entrepreneurship Programs The following B-schools win acclaim from students and researchers alike for being at the vanguard of entrepreneurship education (in alphabetical order): Babson College: Entrepreneurship takes center stage at this Wellesley (Mass.) B-school, where managers from Corporate America come to learn entrepreneurial techniques. Harvard Business School: A large faculty dedicated to entrepreneurship produces much of the case material used in classrooms that teach starting a business around the world. London Business School: Its geographically diverse student body makes for a solid cross-cultural, and academically rigorous, entrepreneurship education. MIT (Sloan): This Cambridge (Mass.) technology mecca allows B-school students to network with engineers, biotechnologists, and computer scientists in other MIT schools. Stanford Graduate School of Business: Its Silicon Valley location gives students a first-hand glimpse of the tech sector and the venture capital industry. UCLA (Anderson): Students consistently praise the school's teaching of entrepreneurship, which emphasizes the nuts and bolts of building a business. University of Pennsylvania (Wharton): The high-powered faculty does plenty of research into entrepreneurship, but the school emphasizes hands-on, learning by doing. Data: BusinessWeek Online How They Made the Cut This list of leading schools represents the best judgment of the BusinessWeek Online staff, based on information and reporting that includes the following: The rankings of corporate recruiters BusinessWeek polled for its 2002 B-school rankings; the number of electives a school offers in the subject and the number of full-time faculty who teach it; interviews with the department chairperson or leading academics at the school to review its strengths and weaknesses -– and those of competing schools; and an assessment of the school's contribution to research in the field. Note that we haven't ranked the leading schools in any order other than alphabetically. ---------------------------------------------- How Students Rate the Schools Recent grads gave the following MBA programs best marks for teaching entrepreneurship: 1. Stanford 2. Babson 3. MIT (Sloan) 4. UCLA (Anderson) 5. UT – Austin (McCombs) Data: BusinessWeek 2002 MBA student survey --------------------------------------------
 Hindo covers management education for BusinessWeek Online in New York
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