“College dropout” has become the most coveted startup founder credential

Although iconic founders like Steve Jobs, Bill Gates and Mark Zuckerberg didn’t finish college, many studies demonstration that the vast majority of successful startups had founders with a degree or graduate degrees.

Despite these facts, the appeal of a dropout founder remains, although VC enthusiasm for the “underrated” is far from constant. It’s a phenomenon that comes in and out of fashion, and right now it’s definitely having a moment amid the AI ​​boom.

This trend is especially evident during Y Combinator Demo Days, where founders increasingly tout their dropout status in their one-minute pitches.

“I don’t believe YC officially tracks dropout status, but anecdotally, in recent batches, I’ve been struck by how many founders highlight that they dropped out of college, grad school, and even high school,” said Katie Jacobs Stanton, founder and general partner of Moxxie Ventures. “Being a school dropout is kind of a credential in itself, reflecting a deep belief and commitment to building. I think it’s seen as a pretty positive thing in the venture ecosystem.”

Although many of the top founders of the AI ​​wave are young, most still chose to stick around for the diploma. For example, Michael Truell, the CEO of Cursor, graduated from MIT, and Cognition co-founder Scott Wu graduated from Harvard.

But despite these examples, a growing number of would-be entrepreneurs fear that sticking around to graduate means missing the most critical window in the AI ​​manufacturing cycle. Some, like Brendan Foody, who founded Mercor, have famously dropped out of prestigious schools like Georgetown to pursue their startups.

As Kulveer Taggar, founder of YC-focused venture capital firm Phosphor Capital, told TechCrunch: “There’s just this sense of urgency and maybe FOMO.” There’s a calculation right now: “I can finish my degree or I can just start building.”

This fear leads to extreme cases. A professor at an elite university recently described a student who dropped out of his degree in his final semester. This student was convinced that the degree would hurt his chances of getting funded.

While some founders fear that a diploma could be a negative sign, Yuri Sagalov, who heads startup strategy at General Catalyst, suggests that VCs are less fixated on the dropout label, especially for students who are close to graduating: “I don’t think I’ve ever felt differently about someone who graduated or didn’t graduate when they’re in [their] fourth year and drop out of school.”

Although self-taught tech prodigies can create startups without formal education, Sagalov argues that there is still value in the social network a university creates and the university’s brand, even if the founder doesn’t receive a degree.

“You have a lot of social value … because you can tell the fact that you participated,” Sagalov said. “Most people will look you up on LinkedIn and they won’t care that much if you’re done or not.”

While many investors now believe that founders can forgo a college degree, not all VCs agree that young founders have an advantage in this market.

Wesley Chan, co-founder of FPV Ventures, isn’t so eager to invest in dropouts because he prioritizes a trait most young founders haven’t yet developed: wisdom. Chan believes that wisdom is usually found in “older founders or people who have a few scars under their belt.”