College is a launching pad for entrepreneurs; you only have to look at world-famous, billion-dollar companies like Facebook and Google, both of which started life in college dorms, to know that. Today, nearly a third of college students plan to start a company just as soon as they graduate, with the same survey revealing that 17% already run a business while studying.
To help them on their way, universities across the country offer everything from degrees in entrepreneurship to startup accelerators, funding programs and mentoring opportunities. We already know that certain colleges like Stanford University are more successful than others at nurturing startup founders, but — when new businesses can provide a significant boost to the local economy by creating jobs and attracting investment — are any colleges particularly good at keeping their entrepreneurial alums within the area?
With this in mind, the team here at Switch On Business went in search of the U.S. colleges that see the most business founder graduates launch companies within their college’s city or state.
What We Did
We first retrieved the 250 U.S. colleges that have produced the most business founders overall according to LinkedIn’s college profile pages, adding the most enrolled colleges locally to our seed list for states represented by just one university. Using Crunchbase, we then retrieved the number of business founders from each college who launched a business between 2014 and September 2023 within the same state or city of their alma mater. For each college, we could then calculate the proportion of their graduate founders who launched a business locally.
Key Findings
- Hunter College has seen more graduate founders (54.55%) start a business in the local city (New York) than any other college in the U.S.
- But 80% of Utah Valley University alums who have founded businesses have done so in Utah — more than any other state.
- 61.6% of the time, business founders who graduated from a college in California have started a company within California — the highest rate of any state.
- California is the top state in which graduate founders from 14 other states start a business.
One in Two Graduates From NYC’s Hunter College Who Start a Business Do So in NYC
Over half (54.55%) of the graduates of Hunter College in New York City who founded a business between 2014 and September 2023 did so within the local area. That’s a higher proportion than any other college in the U.S. As one of the country’s top cities for starting a business, it checks out that local graduates stay in the Big Apple to build a company. Indeed, nearly half of the colleges in our top 20 list are based in New York City, with Baruch College (44.58%) placed as the next-highest ranking.
In second place is Georgia State University in Atlanta (46.32%), a city that one study found to be seventh-best in the U.S. in which to start a business based on a variety of metrics, including the local number of startups per capita and the affordability of office space. Perhaps hugely successful brands already based in the city (like the Coca-Cola Company) also serve as inspiration for local entrepreneurs.
While still at GSU, students can nurture their business prowess at the college’s own Entrepreneurship and Innovation Institute, which offers a seed funding and mentorship program for student and alums entrepreneurs. Innovation seems to be a broader priority for this university, reflected in its status as the second-most innovative in the nation when it comes to improvements made across campus life, facilities and curriculum.
Utah Valley University Produces the Most Graduates Launching Local Businesses
But staying local doesn’t just mean staying within the city or town you went to school in, and some colleges fare particularly well at seeing graduate founders build their businesses within the same state as their alma mater. None more so, however, than Utah Valley University, which has seen 80% of its entrepreneurial alums found a business in Utah.
No doubt helping matters is the fact that UVU is home to the largest business school in the state and an Entrepreneurship Institute that offers mentoring, funding and networking opportunities to students. After graduating, it’s no wonder the entrepreneurially minded are happy to stay local — a variety of factors make Utah one of the most favorable states in which to start a business, including having one of the lowest corporate tax rates in the country.
After that, the ranking is dominated by 14 universities based in California, led by California State University (73.13%), a system of colleges headquartered in Long Beach. Like Utah Valley University, CSU offers a variety of programs and incubators designed to support budding business founders across its campuses. California — like Utah — is also considered to be one of the top states in which to launch a business (more on that later…)
Which U.S. Colleges See the Most Graduates Launch a Business Locally?
Our map below reveals each state’s top college ranked by the proportion of business founder alums who have launched a business within the same state. Among them are James Madison University in Virginia (66.23%), the University of Massachusetts in Massachusetts (38.54%) and North Carolina State University in North Carolina (44.76%)
Click to open the map in high resolution
Florida International University comes top in Florida: 60.48% of its business founder graduates have started a business within the Sunshine State. It could be because graduates — perhaps encouraged by FIU’s social innovation and entrepreneurship programs — find themselves already in good company locally when it comes to entrepreneurship: 0.61% of Florida’s population have started a small business, a higher proportion than any other state.
Texas and Colorado Among the Top States for Graduates Launching Local Businesses
61% of college students plan to stay local after graduating, but which U.S. states boast the highest proportion of graduate entrepreneurs staying local to start businesses? Among the top states are Texas (53%) — one of six states with no corporate income tax — and Colorado (47.3%), where, interestingly, local startups have seen a dramatic drop in funding in 2023 compared to 2022.
But it’s California that leads this ranking: 61.6% of Californian college alums who went on to start a business have done so within the state. Indeed, why move away to be an entrepreneur if you’re already settled in one of the best states for starting a business? And with that in mind…
California Attracts The Most Entrepreneurial Graduates From Across America
Where do graduates tend to go to start their own businesses? California — already the second-most popular state that students want to move to after college — comes top overall, attracting the highest proportion of graduate business founders from 14 other states.
Several factors make California an ideal state in which to launch a startup. For one thing, small businesses in California are in good company, making up 99.8% of all businesses in the state. In a country where 20% of startups fail within a year, new businesses in California also tend to survive longer, boasting the highest one-year survival rate of any state.
California is also one of the most educated states, home to a fairly high proportion (36.2%) of residents with bachelor’s degrees. No doubt, this creates a bigger pool of specialist local talent for startups to recruit from. Looking forward, a new California law — planned to take effect in March 2025 — will aim to increase the availability of funding to women- and minority-owned businesses, likely making the state even more attractive to out-of-state entrepreneurs still in college.
Why Might a College Want Entrepreneurs to Stay Local?
There’s surely plenty of glory and prestige in being the alma mater of a hugely successful business person — but why might a university be particularly pleased with a business founder launching their company within the same city or state from which they graduated?
The most obvious answer is that a new business close by will stimulate the local economy by creating jobs, something startups are particularly adept at, having created 3.7 million new jobs nationally in 2022. Local alums might also be more likely to return to their alma mater to provide mentoring and networking opportunities for entrepreneurial students, encouraging a new wave of local businesses to be built.
Methodology
To identify the states, cities and colleges where the highest percentage of businesses are launched by graduate founders who also studied there, we focused on the 250 U.S. colleges that have produced the most founders overall, according to LinkedIn’s college profile pages. We added the most enrolled colleges to our seed list for states represented by just one university.
We then used Crunchbase.com’s ‘people search’ to identify the number of founders from each college that launched a business between 2014 and September 2023, anywhere in the same state and in the same city where their college is located.
This allowed us to calculate the percentage of local graduate founders that have launched a business in the same city or town as their college and the same state as their college. To calculate the top-ranking states on this metric, we combined any multi-campus colleges in the same U.S. state to be considered one college score.
We also identified which U.S. states will most likely see local graduate founders launch businesses by combining all colleges into one state score.
This data analysis is correct as of December 2023.
| ADDITIONAL SOURCES California State University. (n.d.). 10 Reasons to Choose the CSU. calstate.edu Dienst, J. (2022). From North to South, What Makes California a Hub for Innovation. pcma.org Business Finance Capital. (2023). Why California is a Great Place for Small Businesses. bfcfunding.com |
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