Ever since marketing professor David Reibstein began teaching at the Wharton School of the University of Pennsylvania in 1980, he's encountered several standout students that he's gone on to help mint millions. He'll never get involved with current students, but in some cases he's gone as far as investing some of his own cash in former students' fledgling companies.
"There are always students that are very intriguing that you get engaged with and you want to follow them," said Reibstein. "I'm always willing to meet with people and give advice, but I try to resist getting too involved aside from giving advice. A lot of the ideas are OK and not beyond that, but every now and then you hear a really good idea coming from students who need some help."
Professors often get unique insight into how budding entrepreneurs work and strategize and sometimes they'll also get a preliminary glimpse of an idea with great potential. Many business schools have entrepreneurial programs geared to those students, but sometimes a student who makes a mark might get personal attention from the professor outside of school.
In 1996 two students came to Reibstein with a business plan they were developing based on an idea that Reibstein had kicked around during a class lecture. The day after the students graduated he sat down with them and helped them develop a business plan that evolved into Bizrate and Shopzilla.
Students who are visionaries, are passionate about their business idea and have a good pulse in the marketplace have a good chance to succeed, says Reibstein. The two entrepreneurs who approached him had all those traits.
"Another thing is not trying to conquer the world," said Reibstein. "People often think of the million customers they might get--but not of the first one. The first customer is really critical and the first five customers are very important."
Reibstein flew to monthly board meetings from Philadelphia to Los Angeles for eight years and made an initial seed investment of about $30,000. Although his stake was eventually diluted, it was "not a bad venture," he says, laughing--the business sold in 2005 in excess of $500 million.
Kent Smetters, another Wharton professor, says that the ability to execute is key. He recently launched Veritat Advisors with Danielle Qi, a former undergrad student who'd gone on to work at McKinsey & Company in San Francisco. It's been five years since Qi left his risk management class, but for the past three years the pair had been talking about starting a new model of financial advisory geared toward the middle class. Eventually Smetters talked Qi into leaving McKinsey and starting the company with him.
"It's not just having a good idea, it's really having someone who's super organized and can actually execute," says Smetters. "That second skill set is actually pretty rare--actually being able to execute and being able to breakdown work flow, being able to prioritize, block people, that's ultimately the best skill set."
Despite their age difference (Smetters is 43, Qi is 26, pictured together above) and the former teacher-student relationship, the pair have been equal partners in the venture, says Smetters. While he is currently president of the company and Qi is its chief operating officer, he says he'll likely be looking for someone to take the reins as president and CEO in the third quarter of 2011 and Qi would be a great contender.
"Danielle and I spend long hours working together," says Smetters. "If I didn't respect Danielle as a peer, then we really shouldn't be doing this together."
Many schools, including Wharton, offer entrepreneurial programs and the potential to provide funds to help current students finance a fledgling business. Murray Low, director of Columbia Business School's The Eugene Lang Entrepreneurship Center, is in a committee that allocates anywhere from $25,000 to $50,000 in seed funding to "a viable business plan with good chances of success."
The most promising entrepreneurs are not necessarily the ones with the best academic grades or the ones that stand out immediately, Low says. "But they're the ones who are persistent, the ones that keep on showing up at your door looking for advice--they're also good listeners."
Perhaps one of the most famous cases of a mentor-mentee relationship is one that created three billionaires: Google. When David Cheriton began teaching computer science at Stanford University he couldn't have imagined that two students he would mentor outside of class would become his ticket to billions. But it was partly Cheriton's advice, some seed money and an introduction to investors that helped Google cofounders Sergey Brin and Larry Page build a $198 billion market cap company that is among the most influential institutions in the world today. Cheriton, in turn, was rewarded with a chunk of shares and as of our latest estimate has a net worth of $1.6 billion.