What are reasons not to invest in companies started by dropouts? originally appeared on Quora: The best answer to any question.
In response to a similar question about dropping out I noted that, as an active angel investor and venture capitalist, I have a simple policy of not investing in dropouts. Period. This stirred up a fair bit of vituperation, but also prompted a number of polite, private messages to me from young entrepreneurs asking why I felt this way. Here is how I responded:
Why I do not believe it is in your best interest to drop out of college, and why I would decide not to take the risk of investing in you if you do (regardless of the fact that Jobs, Gates, and Zuckerberg dropped out):
If your goal in life is to spend your working career in a specific, functional job, such as being a plumber or software coder or auto mechanic, then vocational school and a basic functional grounding in verbal and mathematical literacy may be all that you need, provided you will do that one thing for the rest of your life.
But if you are planning to be an entrepreneur who will be creating new businesses, and asking other people to invest in your vision, there are many reasons why finishing college makes a lot of sense. Here are my top ten:
1) It gives you a much larger picture of the world, an understanding of how things fit together, and a broad view of history so that you can learn from the successes and failures of others. You will be able to think critically and think 'outside the box' because you will have the ability to analogize things in your current space to a much larger historical canvas. Whether you're taking business lessons from Sun Tzu or Machiavelli or Andrew Carnegie, entrepreneurial lessons from Johann Gutenberg or Thomas Edison, ethical and philosophical lessons from Plato or George Bernard Shaw, or human behavioral lessons from Charles Dickens or Sigmund Freud, you will simply have a larger toolbox from which to evolve and implement your vision.
2) It will expose you to opportunities and experiences that you are likely to not come across if left to your own devices. How will you know if you might have loved being an art historian, if you have never been exposed to the discipline of Art History? If you came from a high school without a computer science department, an introductory course in CS might set your life on a whole new path. This extends to every corner of the academic experience: most people do not, on their own, get exposed to a dozen different fields of interest unless they were lucky enough to come from a Renaissance family. I found my lifelong passion in the Book Arts at college, something of which I would have been completely unaware had I dropped out.
3) It will give you at least a basic grounding in areas that are not necessarily comfortable for you--regardless of what career you pursue. This will provide you with knowledge and skills you would typically avoid if you only do things you like. I am a business/ marketing/ financial person rather than a techie, but the basic understanding of technology and computer systems that I learned from my undergraduate computer science courses has stood me in very good stead for decades, and informed all of my entrepreneurial activities. Similarly, for someone who lives to code, learning about other disciplines such as marketing, finance and, yes, even philosophy and ethics, will likely make you a better coder, and definitely make you a more valuable team member and entrepreneur. This basic knowledge, like written and mathematical literacy, will give you at least a foundational background when interacting with people from other disciplines.
4) You will learn the ability to communicate effectively to an extent that is much more difficult outside the academic environment. Unless you are one of those rare people blessed with the natural talents of a William Shakespeare or Frank McCourt, your studies in college will give you the tools to persuasively share your ideas and visions with all of those whose support you will need in life: employees, customers, investors, partners, team members, lovers, children. As Francis Bacon wrote, "Reading maketh a full man, conference a ready man, and writing an exact man." For better or worse, the only time that a large majority of people will have the (enforced) discipline to spend time reading great works, writing lengthy papers with critical feedback, and taking concentrated classes in speech, debate, and theater...is in college.
5) You will meet a broad array of diverse people, much broader than you are likely to get involved with in any specific job or industry. College admissions offices spend most of their time assembling a diverse class, you will find yourself, willingly or not, in a stew of people with different personalities, interests, religions, sexual and political orientations. No matter how eclectic your upbringing, this is likely to broaden your perspective, enhance your tolerance and improve your ability to work and play well with others.
6) College is a four-year commitment, which is just about the same time commitment you would be expected to put into a startup. If you show by your actions that you don't have the self-discipline to finish what you started, and are unable to defer the instant gratification of working on your new business until you graduate, that signals to me that you may well do the same thing if I fund you in a startup...and the last thing I want is for you to run off to the next shiny opportunity without finishing the startup in which I've invested my hard-earned cash.
7) College is a one-time investment in enhancing the entire rest of your career and it is highly unlikely that, despite your best intentions, you will ever return to finish a degree after you've dropped out. But once you've had the experience and earned the degree, you have something that will stand you in good stead for the rest of your life. In contrast, the fact is that (a) if you are truly an entrepreneur, you will have virtually infinite opportunities to start or be involved with new businesses throughout your life, and since (b) the vast majority of startups fail, the odds are extremely high that you will be trading a lifetime foundation for a short term, fleeting experience, and always regret "the road not taken".
8) The credential has inherent value, and decrying or denying this fact is not being realistic. In life and in business, there are some things that--for better or worse--simply require a college degree as a pre-requisite. Why on earth would you want to forever set a hurdle in your own path, and block yourself off from opportunities, by being so short-sighted at this early stage of the game?
9) Putting this investment into perspective, and taking the long view of your life, is a sign of maturity. Going for the quick hit of dropping out because you are not willing to put into your academic career the amount of work it takes to 'do it right' is a sign of immaturity. And experience has shown me that investing in immature entrepreneurs is often a recipe for failure. (If you take issue with the statement "not willing to put in the work", please readand tell me that you have done all of this, and more, during your college years. I sure as heck didn't, but I remain in awe of those who did.)
10) If you have discussed this with your parents, school advisors, or other mentors, the odds are very high that they strongly suggested you stay in school and finish your degree. If that is indeed the case, the fact that you are rejecting reasoned advice from mature, experienced people who know, trust, and support you, would give me pause to consider whether you will turn out to be the kind of person who simply won't listen to advice from me either, and the fact is that I consider my advice to be an even bigger investment in you than the cash I bring to the table.
There are many other reasons why I believe so strongly in the value of completing a college education, but these should give you a start in understanding why I have made the decision to simply not invest in dropouts.
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