Growing up in Wisconsin, says Alison Stace-Naughton, “my family always played card games, especially poker. And I was always the one who’d be all-in, the biggest risk-taker.”
So when she told her parents a few months back that she was planning to continue working on her start-up, Spiral-E, after earning her engineering degree from Dartmouth College, “I don’t think it was unexpected, or a shock.”
Leaping into entrepreneurship immediately after graduation, she says, is simply a way to keep her idea alive. After winning $25,000 last year in a start-up competition run by Dartmouth’s business school, she is now trying to raise more money to nudge a new kind of device for endoscopic surgery toward the market.
Stace-Naughton, 24, is part of what seems to be a growing cadre of recent grads choosing to create their own jobs after picking up their diplomas. One survey by Payscale and Millennial Branding found that those in the current generation of students, often called “millennials,” are more than twice as likely to start their own business upon graduation than any preceding generation.
“I absolutely think it’s true that there are more people wanting to start companies right out of school. The Facebook phenomenon has fueled that,” says Matt Lauzon, an entrepreneur-in-residence at the Waltham venture capital firm Matrix Partners. “And there’s also more support for entrepreneurship in the community — whether it’s programs like MassChallenge or Summer@Highland.”
Lauzon cofounded Gemvara, an online seller of customizable jewelry, while earning his bachelor’s degree from Babson College; he graduated in 2007. The Boston company has since raised more than $50 million in funding, and has about 100 employees.
In the six years since Lauzon graduated, Boston’s start-up ecosystem has become much more supportive of entrepreneurs fresh out of school. At least a half-dozen “accelerator programs” like TechStars Boston and LearnLaunchX have sprung up, offering mentorship, free office space, and often small stipends. Many of the participants are recent graduates, or students who have taken temporary leaves to develop a business idea.
There are two new local investment funds, RoughDraft.vc and the Experiment Fund, which make investments in companies hatched on campuses. (RoughDraft even has a board of students making investment decisions.) And universities like Harvard and MIT have start-up office spaces where teams can work and meet while they are in school — and usually for a few months following commencement.
One of the toughest parts of the metamorphosis from college student to entrepreneur may be telling your parents that you won’t be applying for a more traditional job. But that news can be softened if you have won some money in an entrepreneurship competition, gotten into an accelerator program, or perhaps been admitted to graduate school.
Scott Crouch, a senior at Harvard, got into business school, but decided to defer his acceptance for a few years while he works on his start-up, Nucleik. The company, a resident of Harvard’s Innovation Lab in Allston, is developing mobile and desktop software that helps law enforcement agencies manage information and produce reports.
“Being accepted to business school was very comforting to my parents, even though I may never go,” Crouch says, adding, “There’s no time like right after college to try something risky.”
Despite all of the student-focused initiatives in Boston, the magnetism of New York and the Silicon Valley remains powerful for recent college grads and dropouts. Delian Asparouhov, an MIT sophomore working on a start-up called Nightingale, says he’s packing up and moving to Palo Alto, despite finding free office space on campus and taking courses with local founders like Brian Halligan of HubSpot. “I just found the energy [of Silicon Valley] and the number of people you can network with really appealing,” says Asparouhov.
Asparouhov, who says both of his parents hold PhDs, is putting his studies on hold. His company, Nightingale, delivers reminders about taking prescription medications via a mobile app.
For others, figuring out how to pay the rent and buy groceries is a pressing concern. (Free office space and mentorship offered by many start-up initiatives only go so far.) “I have loans that I have to start paying back,” says Andrew Rodriguez, who will graduate from Northeastern this week.
He started a site called KeeWee Listings while earning a bachelor’s degree; it helps fellow students sublet apartments. But he plans to hunt for a traditional job, while keeping the site up and running. “The experience of working for another company is a plus, I think, but the core issue is definitely the financial one,” Rodriguez says.
Jonathan Ellerman, an MBA student at Boston University, is hoping that his energy efficiency start-up, Aeolus Building Efficiency, will collect some cash as a semifinalist in the ongoing MIT Clean Energy Prize competition, which awards $150,000 to its top winner. But Ellerman is also planning on working part time or doing some consulting after graduation. That way, he says, “I could have a guaranteed income stream, and also do the start-up.”
Stace-Naughton says that for now the headquarters of her medical device start-up remains the sofa in her apartment in Hanover, N.H. “We’re bootstrapping the company, while we try to raise enough money for clinical trials and the FDA approval process,” she explains, referring to the Food and Drug Administration. She says she might wind up taking a part-time job or seeking consulting work to make sure she can cover her rent.
But despite the financial worries, Stace-Naughton — lie the rest of the Start-Up Class of 2013 — doesn’t lack for confidence. “It’s going to work out,” she says. “Entrepreneurship is kind of a personality and a lifestyle, more than a career. You just have to be willing to make it work.”
Correction: An earlier version of this story incorrectly stated that Delian Asparouhov received a $100,000 grant from the Thiel Foundation.