I saw this tweet recently from Anmol Maini, a keen observer of the Indian startup scene.
It is yes, funny.
Is it right? Hmm….I must confess the joke has a point, but I am not sure it is entirely right. It isn’t entirely wrong either. It is, as the facebook status update goes, complicated.
I want to use the joke as a springboard to explore a few questions – is there a bias towards IIT/IIM/BITS graduates in the Indian startup scene? Do founders get discriminated / passed on if they aren’t from these schools? Now, I am a conflicted party, doubly so for I work for an Indian venture firm and I do hold a degree from one of these schools. So do factor that in as I explore this somewhat mildly controversial and clickbaity topic.
First, yes, there is no denying that students from these schools – loosely tagged as IIT/IIM/BITS – benefit from the badge value, and that a lot of founders and top execs in leading Indian startups are from these schools. But is there a specific bias towards these schools? Having worked in a VC fund for the past couple of years, and from what I hear of our peer funds I can tell you that there isn’t any such bias towards a school; barring perhaps one fund which overtly states out their preference for elite schools and in fact this is built into their investment philosophy. (I will leave it you to guess its name!) That apart, I must admit that no investment fund in India ‘consciously’ favours these schools.
In fact if you have made it to the pitch stage, my sense is that you have already passed 1-2 filter checks on the team / market size / product + biz model, and from here onwards your academic credential is going to have zero weightage. In fact it may even work to your advantage, in terms of conveying scrappiness and hustle through the distance travelled.
So, is there an unconscious bias that creeps in? Perhaps. But a better response to this question is to widen our enquiry beyond the pitch process, which perhaps is a fairly advanced process in the funding funnel and travel upwards and along the funding funnel. There is no denying that the majority of founders who enter this funnel are predominantly male, privileged (from both class and caste perspective) and from elite institutions.
Founders dont always come from IITs/IIMs/BITS. There are a lot of founders from NITs, some from IIITs and several from institutions such as VIT, Manipal, city colleges such as PESIT in Bangalore or DIT / DTU in Delhi and so on. We are also beginning to see students from colleges such as SRCC or Shaheed Bhagat Singh as well. Still the convenient shorthand of IIT/IIM and now BITS rules. I do think we lack a convenient moniker in India like Oxbridge / Red Brick / Ivy League etc., which leads us to use the IIT/IIM/BITS moniker as a shorthand for academic prestige.
Like this. It isn’t like they wont look at an application from NIT Trichy or ISB. It is just that there is no easy way to cue academic prestige than just mention IIT/IIM/BITS.
I wish we had a term for all such colleges and I think I will invent one. It is interesting to look at all of these colleges (mostly undergrad; the IIMs are postgrad institutions offering an MBA degree, though IIM Indore has an undergrad degree as well) and see a few common characteristics. They are selective, residential largely (though there are ‘day scholars’ in some) and have a national intake. The last is critical for the students in these institutions aren’t all from a specific region or speak a specific language. Some are truly cosmopolitan like BITS, Manipal, IIT Bombay etc., while some have a slight bias towards a specific region, e.g., VIT will have more South Indians, and DTU more North Indians but there is a large cosmopolitan stream as well.
To repeat, these schools are Selective, Residential Institutes with National Intake. And hence I suggest SRINI as an acronym. Almost all elite or quasi-elite (or institutions in the process of becoming elite, be it engineering or non-engineering, have these characteristics. These could be Manipal / VIT in engineering, or the National Law School or Ashoka University or the Srishti Institute of Art & Design etc. They are all SRINI schools or emerging as one.
I would hazard that around 80-90% of the founders who enter the funding funnel have graduated from these SRINI schools, especially the engineering side of SRINI schools. Of course they are also mostly male.
Why is there such a heavy slant towards male engineering students from these schools when it comes to the funding funnel? Why do the entrants into the funding funnel mostly come from this set. This is actually the fundamental question to ask?
The SRINI slant
A significant cause of this slant is accounted by the fact that there is a large proportion of high-quality talent base (especially tech talent) that is concentrated in these SRINI schools. Founding startups, including coming up with the idea, evangelising it amongst a set of believers and getting them to be part of the journey, and finally convincing the gatekeepers to enter the funding funnel requires a certain amount of intelligence, self-confidence and drive, which students from SRINI schools have aplenty. Then there is the fact that by having several alums in startupland, there is access to tacit knowledge as well as networks to tap in to. This matters for the best way to get in to the funnel and move fast through it is to be introduced by a great founder (easier to connect to when s/he is a college senior) or someone known to the VC firm. Because these are all likely to be from the same set of elite schools, the existing patterns get reinforced.
It is also important to keep in mind that not all of the founders who enter the funding funnel are from SRINI schools. There is about a fourth or perhaps a fifth of founders who come from less selective schools in India, or are from elite schools abroad.
While Anmol and other observers are calling out the slant towards a few schools, what is not getting stated aloud is how much starting up in India, i.e., being able to found a startup or join one in its early days, is tied up with economic (and social) privilege. To be able to join or found a startup in India (or anywhere for that matter) you need to be comfortably off, for if you weren’t then you would want to start working in a low-risk high paying job where you can earn well enough to support your family. The very fact that you are able to defer a well-paying, steady job to embark on a startup journey, with little to no income in the first 6-12 months, is an indication that you belong to the economically and (usually) socially privileged.
In fact I would say privilege is a far better explainer of who enters the funnel. I have seen affluent, westernized, english-native speakers from non-selective institutions in the funnel, but I have never seen a less privileged SRINI school founder.
Before you accuse everyone in startupland, please remember that we are but a microcosm of the larger Indian corporate scene, albeit with an accentuated tech / engineering bias. And if the upper echelons of Indian corporate world are full of the economically privileged and / or those from SRINI schools, it isnt perhaps very surprising that it is no different in the startup world. It should be but it isn’t.
To Sum Up
To loop back to our question, is there a bias at the pitching stage towards founders from IIT/IIM/BITS or from SRINI schools? As I shared, it is unlikely there will be a conscious bias. There may well be unconscious biases, but it is rare for them to have an impact on the final decision, because the decision is likely to be made on factors such as the market size and opportunity, whether the founder skillsets are well-poised to tap into this (founder-market fit) and the specific product / business model adopted. These have far greater weightage.
And here I again repeat, by focusing unduly on the pitch process, we are misleading ourselves, for the bigger issue is the tilt towards SRINI schools built into the funnel entry point itself. And the fact that there are significant advantages accruing to the graduates of these schools both from access into VC funds and the funnel, via alum intros, or alum connections into funds, as well as access to startup knowhow that helps them create a better pitch.
But an even bigger issue, and one that doesn’t get actively spoken of or discussed, is that the ultimate determiner of who gets to be in the funnel is privilege. I really dont see that changing it very fast. But recognizing that would be a start.