One more storm cloud?
As Brad Feld points out and expands on, ”there have been a number of thoughtful “early warning sign” posts in the past few days including one from Fred Wilson (Storm Clouds), one from Mark Suster (What Angel Investing & Florida Condos Have in Common), and Roger Ehrenberg (Investing in a frenzied market).”
I’ve got one more data point to add to the growing discussion on storm clouds on the seed investing horizon: the career choices of HBS grads. It may sound crazy but…
"Investors swear by market indicators. Some, like Jeff Hirsch of the Stock Trader’s Almanac, place their faith in the presidential cycle. Others focus on inflows to mutual funds. Still others look at more offbeat metrics like hemlines or Super Bowl winners. Roy Soifer, a veteran banking industry analyst and consultant, looks to the career choices of Harvard MBA students. And it may come as a surprise that their relative preference for jobs in finance is something of a contrary indicator. In other words, when a large chunk of the latest crop of freshly minted MBAs decamps Cambridge for Manhattan — look out below!” (Read the full article on the indicator here.)
The percent of HBS grads going into tech has been slowly ticking up since 2006, with 8% of 2010 grads going into tech full-time after graduation and 9% of HBS 2011s interning in tech this summer. These levels are tied 04/05 numbers for the highest % of HBS grads going into tech since 2001 (10%). My guess is that this underestimates the number of people heading into tech because they are categorized under another industry (for example, something like Gilt could very well be hidden under fashion). Perhaps even more indicative, the percentage of HBS grads interning in venture capital has doubled from 2 to 4% since 2007…and I suspect this number is severely constrained by internship supply available. This too is the highest percentage since 2001 (7%).
A quick glance at other top schools reveals a similar pattern.
No huge alarm bells with this…but maybe one more storm cloud?