Start-up costs for MBA graduates pay off

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The fear that starting a business will inevitably mean an enforced period of belt tightening and dining on nothing but baked bean suppers has dissuaded many high flying executives from quitting their jobs to become entrepreneurs.

Salary data from 20- and 30-something MBA graduates, however, shows the reverse is in fact true. Far from earning less, those that quit corporate careers to create a start-up quickly make up any shortfall and are in fact earning more on average than their salaried peers just three years after completing their business school studies.

In a sample of 7,800 MBA graduates from the world’s top 100 business schools that responded to the FT’s 2015 rankings research, 22 per cent had launched a start-up while studying for the qualification or shortly after completing their course.

Three years after graduation, the average annual income among these fledgling entrepreneurs was $134,000, compared with $132,000 across the entire sample.
Just 5 per cent of those who founded companies reported an annual salary of zero three years after graduation. However, even this may be an overstatement of the financial risk facing founders since this percentage includes those who chose not to reveal their income level in their survey response…