Student founders frequently find it difficult to find support for a compelling idea without an extensive business track record. Nonetheless, if the idea, the presentation, and the timing are right, there's still plenty of money to be had. The era of the Internet startup has spurred an increased willingness among venture capitalists to fund businesses generated in classrooms and university laboratories. Although venture capitalists don't get a lot of business plans from high school students, many firms in recent years have been allocating more resources to investigating and funding businesses generated at colleges and universities. Early Stage's portfolio companies originated in a university.
History provides investors with good reason to pay attention to academia.
Success stories aside, investors are far from unbridled in their enthusiasm for student-initiated startups, especially in the Internet arena. High failure rates associated with Internet startups, along with a stock market far less accepting of dot-com companies, has prompted venture firms to become increasingly cautious in choosing whom to fund. We've seen a shift in the marketplace in terms of how easy it is to get a business funded. And as venture capitalists get pickier, students are likely to feel the effects. The business, which he dreamt up with a classmate during a summer trip to South America, blossomed into a formal plan in the course of the school year.