Marco Kohnsstartups13 min read
Do You Need a Degree to Start a Business? No. Get One First Anyway
Legally, no. I still got the degree first and ran the business alongside it. What the dropout lists leave out, what the data says, and how to sequence both.
No. Nowhere I have lived or registered a company, Germany, Portugal or the United States, asks a founder for a diploma. You need a registered entity, a tax number, and in a regulated trade a licence for that trade. A degree appears on none of those forms.
My answer for anyone asking me the question is still: get one first, and start the business while you do it. I ran a web agency from about age nineteen through my bachelor's, treated the degree as the safe bet and the company as the big bet, and spent those years convinced the university part was the afterthought. A decade later the ranking has flipped. The degree is the thing I would not trade, and the reasons are not the ones the top-ranking guides give. They talk about credibility and networking. What the degree gave me was a way of thinking I have not been able to buy since, a set of doors that stayed shut to people without it, and a floor to fall back on that made the big bet affordable in the first place.
Do you legally need a degree to start a business?
You do not. A business is a legal and tax event, not an academic one. Registering a sole proprietorship, a limited company or a partnership requires identity, an address, in some jurisdictions a minimum capital deposit, and the patience to deal with the relevant office. The exceptions are professions where the licence itself is the barrier: medicine, law, tax advice, certain skilled trades. There the requirement is the licence, and the degree is only one route to it.
So the honest reading of the question is not "am I allowed" but "will it help, and is it worth the years". That is the version the rest of this piece answers, and it is the version most of the guides sidestep by listing people who succeeded without one.
What do the famous dropout lists leave out?
They leave out the base rate. Three names, Gates, Branson and one celebrity chef, appear in nearly every article on this topic, and a list of three tells you nothing about the odds facing the reader. The dataset that does is the Stanford Venture Capital Initiative's, which tracks every US unicorn since 1995. Its founder, Ilya Strebulaev, published the education breakdown in February 2025: compared with the US population over 25, unicorn founders are six times as likely to hold a doctorate, three times as likely to hold a master's, and twice as likely to have completed an undergraduate degree. The dataset covers 1,110 unicorns and 4,975 founders, each unicorn matched against a peer VC-backed company that raised its first round in the same year.
| Category | x |
|---|---|
| Doctoral degree | 6 |
| Master's degree | 3 |
| Undergraduate degree | 2 |
The dropouts are the exception the data has to explain, not the pattern it shows. Source: Ilya Strebulaev, Stanford Venture Capital Initiative, Crunchbase News, 24 Feb 2025: 1,110 US unicorns, 4,975 founders
Two details keep this honest. First, the same research found that a business degree specifically is not the pattern: in a 2023 cut of the data, about 72% of unicorn founders, 2,094 out of 2,916, held no MBA. The degrees that over-index are degrees in general, and technical ones in particular. Second, Strebulaev himself warns against reading causation into any of it. People who finish degrees may simply be the kind of people who finish things. That is fine. The point of the chart is narrower: if you are deciding on a sample of three famous names, you are deciding on the wrong sample.
What did my degree do that my business could not?
It taught me how to think about evidence, and it gave me the fundamentals underneath the software I now build with. Neither showed up on an invoice, which is why I could not see either at the time.
I started the agency at about nineteen, building websites for local businesses, because it could be run from a laptop anywhere and because I had come back from a year abroad needing to earn. It took six to twelve months before it paid. From nineteen or twenty I covered my own rent from that freelance work while finishing a bachelor's in digital media marketing, a mix of computer science and online marketing, in the regular time to degree, which is unusual in Germany where most people in a computing-adjacent subject take longer and almost none run a company on the side. After the bachelor's I turned the agency into SPLIT Marketing GmbH, which a co-founder still runs today.
What I believed then: the company was the education and the lectures were the price of a safety net. What I believe now, after years of reading research, hiring, and building products with AI as my engineering team:
- Sourcing and citing. University drilled the habit of asking where a claim comes from and whether the source says what the citer says it does. Every article on this site runs on that habit, and so did the research I later published. Founders without it get taken in by the first confident slide deck.
- Critical thinking under a marking scheme. Being graded on the quality of an argument, not on whether the client was happy, is a different discipline. The client is happy when the site is live. The examiner asks why you chose that approach over the alternative, and you learn to have an answer.
- Fundamentals down to binary. I can read software architecture today because the degree forced me through how computers work at the lowest level. I did not use any of it in the agency. I use it every week now, building products where I am the person deciding what the AI should build and judging whether what it built is sound.
The agency taught me the one thing every founder struggles with most, how to get customers, which is why I chose digital marketing as the subject in the first place. The degree taught me how to know whether what I had learned was true. Those are different skills, and the second one is the one I could not have picked up on the job, because nobody on a job ever asks for it.
Which degree, if the point is to start a business?
A specialised one, not a general business degree. Depth first, breadth later, because breadth without a foundation is a generalist with nothing to generalise from.
When I applied for master's programmes I was rejected by several generalist management courses at well-known universities and accepted by a specialised one, the data and analytics programme at NOVA IMS in Lisbon, combined with marketing. At the time the rejections stung. In hindsight I am glad about every one of them. A management master's would have made me a generalist at twenty-three, with a vocabulary for every function and a working knowledge of none. Instead I finished the specialised programme at 18 out of 20, the German equivalent of a 1.0, and built the deep expertise, data and growth, that everything since has sat on top of.
As a founder today I do operate as a generalist, the same way I did as a growth product manager at a scale-up. That layer works because there is something underneath it, and building it in that order was a plan, not an accident I noticed afterwards.
| General business degree | Specialised degree | |
|---|---|---|
| What you can do the day after | Talk to every department | Do one department's job better than most of the people in it |
| What it signals to a co-founder or investor | Ambition | A skill they cannot easily hire around |
| What the unicorn data shows | About 72% of unicorn founders hold no MBA | Doctorates and technical master's over-index most |
| Where it fails | You are the generalist in a room of specialists, with nothing to trade | You outgrow it and have to learn the rest on the job, which founders do anyway |
| My call | The later layer, learned by running things | The first layer, and the one that opens doors |
What does a degree buy that you cannot buy later?
Rooms. The degree was never the credential on the wall. It was the sequence of rooms it put me in, and each room was only reachable from the one before it.
Studying in Lisbon meant I could volunteer at Web Summit. Volunteering at Web Summit meant a 6am shift alongside a fellow German volunteer who, after a conversation about whether I belonged in this league at all, told me I was as smart as many Harvard-educated people he knew, and that the difference was usually resources. Through that same group I first heard of Techstars, one of the two largest startup accelerators in the world, and got a place on the Berlin team, which I still consider the best team I have worked with, even if the feeling of belonging there took months to arrive. The master's thesis, written because a professor was willing to supervise a student who kept asking, became a paper in the Journal of Business Research with Prof. René Bohnsack, published in 2025, on how startups use generative AI to grow. Techstars plus the published research is what put a growth product manager role at Bounce, a Silicon Valley-backed scale-up, within reach.
None of those rooms had a sign on the door saying "degree required". All of them were downstream of being enrolled. The volunteer's comment about resources has stayed with me, and I have not resolved it: I believe inherited advantage exists, because the data on parents' education predicting their children's shows it, and I also know I walked into those rooms from a village where nobody had. Both things are true, and I would rather leave them side by side than pretend one cancels the other.
There is also a floor, and the floor is what makes the big bet affordable. The US Bureau of Labor Statistics publishes median weekly earnings by education level for full-time workers over 25. For 2025, the bachelor's row sits at 1,578 dollars against 966 for a high school diploma, and unemployment falls with each level.
| Category | $ |
|---|---|
| Doctoral degree | 2307 |
| Master's degree | 1876 |
| Bachelor's degree | 1578 |
| Associate's degree | 1135 |
| Some college, no degree | 1062 |
| High school diploma | 966 |
| Less than high school | 770 |
The degree is the number you fall back to if the company does not work. That number changes how much risk the company can carry. Source: US Bureau of Labor Statistics, Table 5.1, 2025 annual averages, persons 25 and over, full-time wage and salary workers; page last modified 1 Sep 2026
I am not quoting that chart to argue for a salary. A founder's appetite for risk is set by what happens if the risk goes wrong, and that row is what happens. The safe bet is what let the big bet run for years without the panic that makes founders take bad money or quit early.
When is skipping the degree the right call?
When you already hold the thing the degree is a proxy for: deep experience in the exact industry you are about to build in. That is a smaller group than the dropout lists suggest, and it is mostly not nineteen-year-olds.
The best evidence on who succeeds at this is the NBER study by Azoulay, Jones, Kim and Miranda, which used US administrative data on new firms rather than a survey of famous founders. Two findings matter here. The mean age of founders of the 1-in-1,000 fastest-growing new companies is 45.0. And prior experience in the specific industry predicts much greater rates of entrepreneurial success. The authors describe their results as strongly rejecting the idea that youth is a key trait of successful entrepreneurs.
Read against the question in this article, that says: the founders who genuinely do not need the degree are the ones who spent fifteen years inside an industry and know where it leaks. If that is you, the degree is a detour. If you are eighteen and the argument for skipping it is that Bill Gates did, the study is describing someone else.
Two more cases where I would not push the degree:
- The business is already paying and the degree would stop it. A company with customers is worth more than a place on a course. Defer the course, do not kill the company.
- The trade is licensed by the trade, not by a university. If your field's barrier is a professional certification or an apprenticeship, that is the credential to get, and a general degree adds cost without opening the specific door you need.
How would I sequence it today?
Run both at once, and be honest with yourself about which one is the safe bet. This is the sequence I followed, cleaned up with what I know now.
- Start the business in the first year, not after graduation. The customers teach you what the lectures cannot, and the lectures give you a place to test what the customers taught you.
- Choose the subject by the founder problem you are worst at. For nearly everyone that is getting customers, which is why I chose marketing. If you can already sell, choose the technical subject that lets you build without asking permission.
- Go deep before you go broad. A specialised programme over a general management one. The generalist layer arrives on its own the first time you run something, and the reasons people give for leaving a stable job rarely include a broader vocabulary.
- Treat the campus as a door to rooms, not a room in itself. Volunteer at the conference, apply for the internship abroad, ask the professor whether the thesis could become a paper. Each of those was open to me only because I was enrolled, and each led to the next.
- Keep the floor in view. If the business fails, the fallback should be a job you can get. The floor is what lets you take the bet seriously.
The people who tell you a degree is unnecessary are usually right about the law and wrong about the odds. I dismissed mine while I had it and credit it now that it has paid out for a decade. If you are still ahead of that choice, and your horizon was drawn by people who never crossed it, take the degree and start the company in the same year. Nobody will stop you doing both, and almost nobody does.
Questions people ask
Do you need a business degree specifically to start a business? No, and the data argues against it as the priority. About 72% of US unicorn founders hold no MBA, while technical and research degrees over-index most. Pick the subject that fixes your weakest founder skill, not the one with "business" in the title.
Can you start a business while studying? Yes, and it is the sequence I recommend. I ran a web agency from about nineteen through my bachelor's and paid my own rent from it. The business supplies the problems, the degree supplies the method for thinking about them.
Is it too late to start a business after a degree and a job? The NBER data says the opposite: the mean age of founders of the fastest-growing 1-in-1,000 new US companies is 45, and industry experience predicts success. Starting later with experience is the norm, not the exception.