What College Can Teach the Aspiring Entrepreneur

What to Study, Where to Study—and Other Ways to Use Your Education to be Ready to Start a Business

By Anna Prior

November 3, 2014

How do you use college to learn how to be an entrepreneur?

For the student looking to launch a company after graduation, the answers to the typical questions—where do you go to school, what do you study, what clubs do you join and so on—aren’t necessarily the usual ones. Aspiring entrepreneurs should view college as a unique chance to build up a set of diverse skills, create a network of potential investors and partners, and soak up life experiences that will help them fly solo.

With that in mind, here’s the entrepreneur’s guide to getting the most out of college.

A Big Name Doesn't Always Matter Much

One of the basic things most people think about when looking for a school is how it will look to a future employer. But entrepreneurial students need to remember that for the most part, nobody is going to be paying close attention to their choice of school. No boss will be scrutinizing their résumé—and, the experts say, potential partners and venture investors likely won’t be looking at it either. So, a prestigious or pricey school isn’t always a must, or even a plus.

Most venture capitalists care less about entrepreneurs’ college history than whether or not “their startup [is] solving a big problem and if the founders are the right people to take that idea to a viable company,” says Joey Pomerenke, an entrepreneur and founding partner of UP Global, a nonprofit that runs entrepreneur-focused programs like Startup Weekend and Startup Digest.

“An expensive school isn’t the key to success,” he says. “What matters is that they have the mind-set of being successful, no matter what, so it doesn’t matter what school they went to.”

Put Networking Above All Else

However, there’s a big caveat for prospective entrepreneurs to bear in mind. Even though the brand name of a school doesn’t always matter when dealing with investors and others, it may come in handy for another reason: networking.

One of the biggest benefits of going to college is the opportunity for would-be entrepreneurs to be exposed to a vast array of ideas and to build relationships with peers who could one day turn into partners, advisers or investors.

A prestigious school, or one with a solid track record of student startups, may draw more well-connected students and quality mentors. Similarly, a school with a strong alumni network (think highly rated or Ivy League) can offer a wealth of potential business contacts and investors.

The community where the school is located also matters. Going to school in a more entrepreneurial community, such as Silicon Valley, Chicago, New York, Boston or Seattle, will provide a lot more opportunities for networking and real-world learning than a campus in an area without a lot of business development.

Similarly, students should look for schools in a region that specializes in the industry they want to enter, says Scott Gerber, founder of the Young Entrepreneur Council, or YEC, a national invitation-only network of entrepreneurs age 40 and under. Being in the right spot gives students access to a local community of mentors and investors who understand the industry.

Be Mindful of Debt

Going to college and starting a business can be expensive propositions. Business owners loaded with student debt may end up in a big financial hole—their families may have tapped out their resources helping to pay for school, leaving them unable to contribute to the business, and the entrepreneurs themselves may face a tough time qualifying for traditional business loans or other types of financing.

That’s why experts say it’s critical that potential business owners need to think about how much debt to take on and how to pay back student loans, right from the get-go.

For one, be sure to research the different types of repayment options that are available, says Mr. Gerber. One example is the income-based repayment plan for federal student loans that is available for qualifying college graduates who move on to low-paying jobs—a situation facing many self-employed people, at least at the start of their venture. The program can keep monthly payments low due to a sliding scale based on income.

For instance, qualifying borrowers who earn less than 150% of the poverty guidelines for their family size—which would come out to roughly $17,505 based on the Department of Health and Human Services’ 2014 poverty guideline of $11,670 for a single person—don’t have any monthly loan payment. Those who qualify for income-based repayment and make above 150% of the poverty line will have their loan payments capped at 15% of whatever they earn above that amount, according to the Department of Education.

“At the end of the day, you’re going to have to pay the bill, but you want to make sure you’re giving yourself the most optionality,” says Mr. Gerber.

Students should also look into financial assistance available for entrepreneurs. Several organizations, including the National Association for the Self-Employed and the National Federation of Independent Business, offer scholarships that can help student entrepreneurs. Individual schools may also offer scholarships. California State University, San Bernardino, for example, has the Spirit of the Entrepreneur Scholarship Fund, which gives out up to $10,000 in scholarships a year to both undergraduate and graduate students majoring in entrepreneurship.

You Don't Need to Major In Business

What should budding entrepreneurs study once they pick a school? Anything they want.

There are many varieties of business major out there, including programs that focus on entrepreneurship. But Mr. Pomerenke advises students to choose a major they’re passionate about, rather than just a formal business curriculum. In his experience talking to thousands of entrepreneurs, he says, there is very little correlation between what a person majored in and if they become an entrepreneur. Two acquaintances of his majored in psychology and anthropology, but went on to start a music festival together, he says.

And among notable names, Amazon.com Inc.’s Jeff Bezos studied computer science and electrical engineering (far from retail, e-commerce and books), while Snapchat co-founder Evan Spiegel studied product design at Stanford University.

That doesn’t mean staying away from business courses entirely, the experts say. But students should combine things like accounting, statistics and management with other courses that suit their passion, as well as more diverse offerings that might build their skills in ways they wouldn’t expect.

A journalism or communications course, for example, can help students get comfortable with cold-calling potential investors or mentors, or approaching strangers on the street for testing or research, says Michael Marasco, clinical professor and director of the Farley Center for Entrepreneurship and Innovation at Northwestern University. Meanwhile, theater and performance courses can help with public speaking.

Students should also remember that startups usually aren’t entirely solo flights, so they don’t need to worry about mastering every single skill under the sun. “Most companies have two to three co-founders with complementary skills, so students should use their time to find the right kind of founding team to get the skills for them to succeed,” says Andrew Zacharakis, a professor of entrepreneurship at Babson College in Wellesley, Mass.

Focus On Experiences - Not Grades

Just as the brand name of a school doesn’t matter as much for entrepreneurs, neither do the grades on a transcript. Instead of putting all their time and energy into keeping their GPA high, entrepreneurial students should focus on taking away the information and skills they need, as well as key relationships and experiences.

That means pouring a lot of effort into extracurriculars. Starting up a new student organization, or taking on a leadership role at an existing club, could be an opportunity to hone entrepreneurial skills. (Avoid window-dressing, says Mr. Zacharakis, referring to just being the president of a student organization that doesn’t do anything of consequence just to add to a résumé.) And many schools now offer activities aimed squarely at future business founders.

“There’s a huge amount that happens outside of the classroom—incubators, startup weekends, hackathons,” says Stewart Thornhill, a professor of entrepreneurial studies at the University of Michigan’s Stephen M. Ross School of Business. “Whether it’s run by the university or student-led activities, there are so many opportunities for students to make connections and learn basic skills that aren’t necessarily part of the curriculum,” says Mr. Thornhill.

And, of course, students should budget plenty of time for networking. Experts advise young entrepreneurs to be engaging and enthusiastic, but avoid being pushy or demanding.

“It’s kind of like dating,” says Mr. Zacharakis. “You see someone attractive, you approach them, get their number but don’t ask them to marry you right away—that’s kind of creepy.”

Seek Out Good Advisors

Entrepreneurs should also be on the lookout for potential mentors. Along with faculty members and other professionals brought on to campus to mentor, Mr. Thornhill recommends seeking out the local small-business development office. He says many communities have these sorts of offices funded by the state or a local chamber of commerce, and they can typically provide some guidance and connect young entrepreneurs with mentors.

Another good source of help: local banks. “Community bankers typically know who the business mentors are,” says Mr. Thornhill.

But students should be sure to have candid conversations with any potential advisers at the start of a mentoring relationship about expectations. Is the mentor just there to give advice, for instance, or will he or she expect an invitation to join the board of a fledgling company or to have some ownership or management role?

Students should be wary of mentors seeking just to latch on to potentially successful startups. “It’s not common but not unheard of for people to hang around at ecosystems, hoping to get a piece of the pie,” says Mr. Thornhill, adding that entrepreneurs need to do due diligence and research on any potential mentors.

He says warning signs include a mentor who doesn’t actually do anything except mentor and one who hasn’t launched a business. Students should ask for references and do some fact-checking online. Says Mr. Thornhill, “A good mentor should applaud you for doing your homework, whereas someone who is a bit dodgy might get a little nervous.”

Forget Summer Vacation

It’s tempting to head out to the beach when summer rolls around, but in addition to working on their own ideas, young entrepreneurs should consider spending their summer months interning for other, more established entrepreneurs.

Undergraduate students have at least three chances at summer internships ahead of them and can use each one to explore a different part of the business cycle, says Linda Darragh, professor and executive director of the Larry and Carol Levy Institute for Entrepreneurial Practice at Northwestern University’s Kellogg School of Management. For example, after freshman year a student can consider interning at an innovation lab at a well-established company. Next summer, it might make sense to intern at a company in the high-growth stages. Before senior year, students can check out a startup.

The type of job doesn’t matter, she says—just being in that environment can be helpful. So, interns should be ready to roll up their sleeves and do everything, including taking the trash out at night.

Another activity to think about is studying abroad, which can give students a firsthand look at overseas markets and a better understanding of how to plunge into the global economy. Robert Rosenberg, director of entrepreneurship programs at the Polsky Center for Entrepreneurship and Innovation at the University of Chicago’s Booth School of Business, says it’s generally more useful to learn about one’s own startup market. But if students do choose to go abroad, they “should be planful” and choose a destination that’s known for a particular industry or is a hotbed of innovation, like London, Shanghai or Tel Aviv, and try to land a position at an incubator or an accelerator.

Think Hard Before Launching

Finally, there’s the question of whether or not to get started on an entrepreneurial career while at school. Many experts note that the classroom and campus can be great places to conceive and test out new business ideas—plus, the risks are low, especially for undergraduate students. “You generally don’t have a family, you may have some student debt, but the challenges that complicate your life are generally at their least,” says Mr. Rosenberg. “The downside risk of failing is at its lowest.”

Still, others say that actually launching a business while still in school can be challenging since students risk not getting all they can out of school or giving all they can to the business.

At Stanford Graduate School of Business, for example, graduate students aren’t encouraged to launch their businesses while pursuing their degrees. “We encourage them to use their time to explore and really understand a user need, do some testing, and apply what they are learning in the classroom, but while we can’t stop a student from launching while in school, we don’t encourage it because we want students to focus on academics and make the most of their time here,” says Leah Edwards, director of the school’s Center for Entrepreneurial Studies.

Ms. Prior is a staff reporter of The Wall Street Journal in New York. She can be reached at anna.prior@wsj.com.