B-school graduates are giving up on the job market and starting their own businesses instead. Funding is scarce, but schools are offering support
By Alison Damast
Lindsay Giovachino was feeling frustrated as she approached her business school graduation this past May at the University of Miami School of Business(Miami Full-Time MBA Profile). Like many of her classmates, she had cast a wide net in her job search, applying for management jobs in fields ranging from the nonprofit world to the music industry, with little luck. The final blow came when people started suggesting that Giovachino, an aspiring singer and songwriter who goes by the stage name Lucia, take an unpaid internship with a record company. "To hear that was like a nail in heart," Giovachino says. "I just spent all this money getting my MBA and I couldn't deal with starting at the very, very bottom."
By Alison Damast
Lindsay Giovachino was feeling frustrated as she approached her business school graduation this past May at the University of Miami School of Business(Miami Full-Time MBA Profile). Like many of her classmates, she had cast a wide net in her job search, applying for management jobs in fields ranging from the nonprofit world to the music industry, with little luck. The final blow came when people started suggesting that Giovachino, an aspiring singer and songwriter who goes by the stage name Lucia, take an unpaid internship with a record company. "To hear that was like a nail in heart," Giovachino says. "I just spent all this money getting my MBA and I couldn't deal with starting at the very, very bottom."
Instead, she focused her energy on developing a business plan she'd written in her entrepreneurial class this winter, with the help of a friend who owns a Miami-based recording studio. By the time graduation rolled around, she had launched an independent record label, Burning Tongue Publishing Company, which she hopes will be a new model for promoting and distributing musicians' work. Family, friends and artists interested in recording and working with the company are helping her fund the project. Plans are already in the works for albums recorded by a Slovenian band and an Italian rock group, as well as Giovachino's debut CD.
"With this I'll be unpaid for a while, but at least at the end of the day I'll have something to show for it," she said.
Post-Grad Startups
Giovachino is not alone in her entrepreneurial ambitions. The new business bug has bitten both graduate and undergraduate business school students hard this year. Typically, only a handful start businesses after graduating, with most choosing to go the more conventional route by securing a full-time job offer. This year, the number of business students launching companies after graduation, or even while still in school, has skyrocketed. Business schools from Harvard Business School(Harvard Full-Time MBA Profile) to NYU's Stern School of Business(NYU Stern Full-Time MBA Profile) are reporting a surge of interest from students who have decided to strike out on their own.
The upsurge in entrepreneurship comes at what is in many ways the worst possible time. In the first quarter of 2009, venture capital activity plummeted to just $3 billion—a new 12-year low—according to a new report from PricewaterhouseCoopers and the National Venture Capital Assn., raising the possibility that many student ideas might never proceed beyond the business plan stage, says Kip Harrell, president of the MBA Career Services Council, an umbrella group for MBA career services officers: "Students recognize how bad the economy is and how hard getting capital is."
In response, schools are ramping up the support they offer to aspiring entrepreneurs, creating summer business incubators, launching new curriculums in the subject, and giving them additional counseling on how to start a business in challenging economic times.
