Why does an MBA from Stanford earn more over a career than one from Harvard or Wharton? It boils down to a few things, the best alumni network in the world, location in the San Francisco Bay Area, proximity to Google and Facebook, and small class size — half that of Harvard. But according to Bloomberg Businessweek, employers are willing to pay a premium for Stanford grads because they possess valuable intangibles: entrepreneurship and intrepidness.

At Stanford, which ranks as the second-best MBA program in the US, after Harvard, students are encouraged to pursue their passions rather than settle for "traditional gigs" in finance or Wall Street. “We have a culture where you are encouraged to do whatever you want, to explore the things you want to do that others may think is crazy,” Ross Pedersen, a 2016 Stanford MBA grad who quickly snagged a vice president role at a hedge fund, then quit to join the US Army, told Bloomberg.

More importantly, Stanford University encourages its students to think big and hatch ideas for new companies. As a result, their MBAs seem to come with a resolutely fearless attitude, hoping to follow their dreams rather than just bank the biggest paychecks.

"Highly ambitious students at other top-ranked business schools normally seek lucrative jobs in private equity and other well-paid sectors," Bloomberg reports. "At Stanford, those kinds of jobs generally elicit 'snores' from fellow students, because so-called gunners chase riskier ventures."

Not surprisingly, among top-50 MBA programs, Stanford has the highest rate of entrepreneurship, Bloomberg Businessweek survey data show. At the typical business school, some 3 percent of recent MBAs start a business upon graduation. Sure enough, at Stanford, about 16 percent of the class goes into entrepreneurship immediately after graduation, a rate that’s held relatively steady over the last five years, says Stanford's career center.

The Stanford MBA program is frequently visited by venture capitalists who work on nearby Sand Hill Road in California's Menlo Park. In recent years nearly all Stanford MBAs took entrepreneurship courses.

Stanford is a place so discriminating it can afford to turn down applicants who are excellent in all of the ordinary ways in favor of the utterly extraordinary — Olympic athletes, authors, and fledgling founders.  

“When people go to recruit at Stanford, they recognize they’re getting candidates who probably got offers from Harvard and Wharton,” Jay Bhatti, a venture capitalist, told Bloomberg.

Stanford's business school has an admissions rate of just 5.1 percent, compared with 9.6 percent for Harvard and 12.7 percent for Wharton-Penn.

"It's simply the best," explains one student, and the numerous students who turned down Harvard Business School for Stanford presumably agree.

Six to eight years out, the average Stanford MBA is making $285,000, Bloomberg found. That's in part because so many end up in the Bay Area, which has four of America's 15 highest average adjusted gross incomes. Silicon Valley’s culture and Stanford’s success in making that culture its own is another reason that Stanford grads out-earn their peers.

There's a winners-take-all, self-reinforcing cycle in business education: Stanford attracts excellent student talent, which in turn attracts intense recruiter activity and high-salary offers. The employment results make it easier for Stanford to attract excellent student talent and the cycle continues.

Stanford's illustrious alumni, includes 244 active CEOs and at least four self-made billionaires. Some notable Stanford Graduate School of Business  alums include Phil Knight the founder of Nike, Charles Schwab the founder of Charles Schwab, and Mary Barra the CEO of General Motors.

Uttara Choudhury is a writer for Forbes India and The Wire. In 1997, she went on the British Chevening Scholarship to study Journalism in the University of Westminster, in London.