Getting off the Ground: Exploring Startups at UCLA

In recent years, UCLA has developed a community where students can explore their entrepreneurial endeavors. Campus clubs and organizations foster environments and networks for student-led startups to get off the ground. Taking a deeper look into these groups reveals the biggest challenges and opportunities that come with building a successful startup as a UCLA student.

On campus, there are over 40 different clubs, organizations, accelerator programs and funds that support the growth of startups and other entrepreneurial ventures at UCLA. These resources and organizations are run by students, faculty, staff and alumni.

Despite these resources, it is very difficult to build a successful startup. The failure rate for new startups is around 90%. In the first year, around 20% of startups fail, and within two to five years, 70% of startups fail. While these statistics seem hopeless, you can increase your chance of success by avoiding the common mistakes that are made when building a startup. Some of those mistakes include having poor product-market fit, insufficient marketing and insufficient funding.

Industries

The startups created at UCLA span many different industries, ranging from education to venture capital to AI. The bar chart below shows the number of UCLA-founded startups within each industry from 2002 to 2023.

Note: Abbreviations are defined as AI/ML: Artificial Intelligence and Machine Learning, B2B SAAS: Business-to-Business Software-as-a-Service, Consumer SAAS: Consumer Software-as-a-Service, Ecommerce/CPG: Ecommerce and Consumer Packaged Goods

Graphic reporting by Joey Ling, Stack Intern

Evidently, there are plenty of different fields for students to pursue their entrepreneurial endeavors, though the most common ones are Agency/Coaching and Venture Capital (VC). VCs provide revenue to promising startups in exchange for a percent of the profits, and Agency/Coaching businesses help startups to network, acquire funding or just get started. Both these types of businesses are crucial to supporting startups in the beginning stages, helping them to get off the ground. Recognizing the importance of having support for early-stage startups, Lance Ding, a fourth-year cognitive science student, founded Startup Village as a community where Bruins could network with and provide resources and insights for one another. Ding explains his goals behind creating his business.

“What I’m trying to do is build an environment where people are really supportive – where there’s a network that you can tap into that can help you along your journey. I just wanted to build a community that I wish I had when I was building my company.”

There are many different ways startups are launched at UCLA, whether it be a continuation of a class project or a random idea come to life. Co-founders Mick MacLaverty and Cory Micheel created their business Highway Benefits, a student loan repayment company, from their master’s thesis. As UCLA students, they had the resources to research businesses and create a successful business model. However, it’s up to the founder to look for and utilize those resources, MacLaverty said. MacLaverty comments on the benefits of networking as a UCLA student.

“If you are a UCLA student, and you’re asking to interview them for research purposes, that’s a different, easier way to get a conversation with someone and to actually understand … how they think about funding businesses,” MacLaverty said about venture capitalists.

Most importantly, startups founded at UCLA can create a strong community of like-minded individuals who are eager to get involved. Tejes Srivalsan, the CEO and co-founder of Poppin who is currently on leave as a UCLA student, has taken advantage of this community.

“95% of my team is UCLA-based, in the sense that they went to UCLA at one point or they’re still at UCLA. So it would have been impossible for me to tap into that network if I wasn’t a student here at UCLA,” Srivalsan said. Srivalsan comments on the benefits of targeting students for both employment and consumer demographics.

“You have access to a bunch of people that you could recruit for your team. And then you also have access to a bunch of people that could be your potential users, which is not the case once you graduate college.”

Within each industry, there are also founders from a wide range of backgrounds, thus demonstrating how students don’t need to be in a business program to develop a successful startup. The treemap below shows the different undergraduate or graduate majors of UCLA startup founders.

Graphic reporting by Joey Ling, Stack Intern

The most common startups are in Agency/Coaching and VC, though within all of these fields, there are founders who come from different backgrounds. This gives each startup a unique purpose, strategy and goal. Additionally, many of these student founders come from more than one educational background. 76% of these founders are undergraduate students, 6% are graduate students and 18% are students in other programs, such as an extension or an accelerator. Even with this large pool of founders, MacLaverty believes the startup community at UCLA could be better.

“Something that UCLA could do to improve is … bridging together all dissimilar groups at all the different schools. … Just because you’re in the School of Engineering doesn’t mean that you can’t work with undergrads to start a business and doesn’t mean you can’t get help from the law school. … There could be a bit more harmony between the different groups,” MacLaverty said.

Funding challenges

One of the most common reasons why developing startups fail is a lack of funding. According to a study by Skynova, 47% of startup failures in 2022 were due to a lack of financing. (The reasons for startup failure add up to over 100% since many startups fail for multiple reasons).

Ding elaborates on the current challenges for startups at UCLA and explains why UCLA needs to be more founder-friendly.

According to Ding, UCLA does not match up to schools such as the University of Southern California, Stanford and UC Berkeley. “We need to have a community where people are super pumped” as well as some “serious institutional funding,” Ding said.

Although there is an abundance of students with great ideas and who are willing to get involved in new projects, some student entrepreneurs believe there is a lack of institutional support in place for them. Poppin, which continues to gain popularity among UCLA students, went through a 1 1/2-year process of talking to VCs and accelerators to accrue funding.

“Realistically, there’s not that many resources on campus at UCLA that helped me raise money,” Srivalsan said.

Graphic reporting by Sydney Tomsick, Stack Intern

A lack of funding for startups at UCLA could affect the success of student-led startups. The chart above shows the relationship between the amount of funding a startup receives and how long their startup remains active.

40.3% of the startups have low funding ($0-50K), 26.9% have middle-level funding ($50K-1M) and 32.8% have high funding ($1M+). There are seven startups at each funding level that have lasted less than a year. All but one of these startups was created in 2023 and is still active today.

The startups with low funding dominate the one- and two-year columns. Low-funded startups make up 14 of the 19 startups that have been active for one year. Meanwhile, the startups with funding over $1 million dominate the right side of the graph. Highly funded startups account for most of the startups that have been active for three, four, five and over five years.

Conclusion

Despite the difficulties of creating a successful business, the number of startups founded each year at UCLA between 2002 and 2023 has increased. 21% of the startups from our data were founded in 2022 and 29% were founded in 2023, meaning half of the startups from our data were created in the past two years.

As the majority of startups don’t make it past the beginning stages, there is no doubt that creating a successful business is laborious. When asked what advice they have for students who want to begin a startup, Srivalsan, Ding and MacLaverty all said to just start.

“If you’re actually interested in pursuing something and creating something with value, the only way to do it is to do it,” MacLaverty said.

Ding shares a similar sentiment to MacLaverty by giving a suggestion to future entrepreneurs: “Sell your idea before you build it.” As a part of taking the first step, Ding suggests that entrepreneurs create a smaller version of their idea that they can create in under three weeks. This acts as a test of their startup. If people buy their “test startup”, then “that’s validation that you can build it,” Ding said.

Srivalsan echoes MacLaverty and Ding’s advice. He says “you really can’t see where you’re going, but you just need to have some courage to take the first step and then trust that you will figure it out along the way.” He refers to this first step as a “leap of faith.”

About the Data

All visualizations were created using data on a random collection of 67 startups founded by UCLA students between 2002 and 2023 from Lance Ding. We found the major/program of each founder, as well as their startup’s start and end date, through their LinkedIn profile.