I don't think the point is that all students are worthless, but rather that colleges aren't this huge source of untapped potential that they are popularly imagined to be. This shouldn't really come as a surprise; most brilliant hackers/entrepreneurs know this, which is why they want to leave.

Think about it. All I want is to be surrounded by brilliant people working on interesting things, which college can't provide. Which is why I want to leave. But this same logic shows why funding college students isn't really an arbitrage opportunity. Even if you could figure out who the brilliant ones are, which is difficult, there are too many social and systemic forces pulling in the wrong directions.

(N.B. I'm not claiming to be brilliant myself, only that given the choice I prefer working with others who are.)

Spot on. Most of the people taking computer science at my university dont care about hacking away at interesting problems. They're all here because they know that they can get a high paying job in The City when they graduate.

The problem is not the students themselves, but that their circumstances make them a flight risk. If you encourage people to start a startup as an alternative to a summer job during college, they won't be very committed to it, and commitment is the most important thing in a startup.

The moment someone graduates, this problem goes away, because then all the social pressure switches to encouraging them to work on the startup, instead of encouraging them to go back to school.

From my two years at university, I've had interesting conversations with friends specifically about starting something.

Here's the problem: from what people hear in the media, college folks have this idea that START UP = GET-RICH-QUICK. And on that basis, it is not hard to get someone to be your cofounder. Of course, then I explain to them that while this could make us really rich, it also has tremendous risk and that I start start-ups FIRSTLY because it is my passion before anything else. At that point, almost everyone I know just finds it easier to maintain their good GPA instead of risk their GPA and degree for a start-up.

A good test I have is asking someone what they would do if they are taking an exam and find out midway through that their high traffic server and website is down.