Kimball Thomas and Davis Smith, co-founders of the e-commerce site Baby.com.br, had just six hours in Brazil to pitch to prospective investors and recruit a promising executive for the chief operating officer role.

With little time left after a four-hour meeting with Monashees Capital, the prospective candidate agreed to drive the entrepreneurs back to the airport for his interview, braving the city’s notoriously congested roads as he answered their questions. Thomas and Smith, who are cousins, made their evening flight, and Smith got home in time for his final exam at business school.

“Between my redeye flights, I didn’t have time to study,” Smith said. “But I realised, the whole reason I went back to school was to build a business like this.”

Smith, who attends the Wharton School of the University of Pennsylvania, and Thomas, of Harvard Business School, are part of a growing number of business school students rejecting traditional postgraduate paths like investment banking, hedge funds and consulting. It’s a trend that is accelerating in the wake of the financial crisis as Wall Street loses its lustre and Silicon Valley shines with a new crop of multibillion-dollar start-ups.

At Harvard, some of Thomas’ classmates are applying their entrepreneurial ambitions to technology ventures. Kevin Nazemi, a former Microsoft product manager, started Done, a personal productivity service, last year. Daniel Gulati, a student who helped Thomas draft his early investor presentations, founded the retail site Fashionstake.com with a fellow classmate, Vivian Weng. Graduates from the class of 2010 started 30 to 40 businesses last year, a 50 per cent increase from the previous year, said William A. Sahlman, a professor of entrepreneurship at Harvard Business School.

“The level of entrepreneurship activity here, and I presume at other schools, is up dramatically over the last two years,” says Sahlman.

Baby.com.br is the second start-up for Thomas, 31, and Smith, 32. In 2004, the students started PoolTables.com, with about $20,000 scraped together from friends and family. The venture taught them the basics, like how to coordinate with vendors in China and how to run an e-commerce site, was profitable in its first year.

Now, the two are tackling a broader, if not a more complicated market.

Smith got the idea for Baby.com.br after trying to find diapers for his son, Jack, during a family trip to Rio de Janeiro last year. He had to visit three stores to find a package of Pampers in the right size. Struck by the lack of high-quality baby care goods, Thomas saw an opportunityin Brazil’s fast-growing market. The start-up follows a similar strategy to Quidsi, the owner of Diapers.com. That site, also co-founded by a Wharton graduate, has attracted more than one million parents in the US with free shipping on goods for their children. E-commerce giant Amazon.com snapped up Quidsi this year for $545 million. “We actually see a lot more potential for e-commerce in Brazil,” said Thomas, the startup’s chief executive. “E-commerce there is so much more nascent.”

Even so, they face more challenges than with their previous site, including a different regulatory and tax regime than in the US. In Brazil, the payment processing system is also more fragmented and while the plan is to start the service in July, Thomas says they might have to push it back.

Investors, inside the school and out, have taken notice. In late April, Baby.com.br was named one of the top three winners for Harvard’s annual Business Plan Contest, which came with a $25,000 cash prize. The award is on top of the $3 million that Thomas and Smith raised in February. That fundraising effort, which valued the company at $5.6 million, included several well-known venture capitalists, including Monashees Capital and Ron Conway of SV Angel, who has stakes in Twitter and Zynga.

“Harvard carries some distinction, you can catch some people’s eyes,” said Thomas, referring to prospective investors. “On the margin, if they can, they get back to you.”

The contest is part of a broader effort by the school to foster innovation. Last year, budding entrepreneurs at Harvard formed the Startup Tribe, a student group. The organisation, which has more than 150 members, persuaded Harvard to start the Minimum Viable Product Fund, a $50,000 fund for new startups. The programme distributes awards of roughly $5,000 apiece to promising teams, including the nine winners announced in March.

“We’re a scrappy, adaptive community” said Andrew Rosenthal, a member of the Startup Tribe. The group has been gaining traction, because of a confluence of factors. “We have a new dean, an active network of recent graduates, who mentor, and there’s a strong demand for a student-run community,” he said.

The school is also planning to open in the fall the Harvard Innovation Lab, a student centre for start-ups, where founders can work with peers and Harvard’s entrepreneurs-in-residence.

Of course, business school can also be a significant hurdle for passionate founders. Thomas admits that his grades probably suffered last semester, as he struggled to juggle his classes with investor and client meetings in Brazil, San Francisco and New York. For the moment, he’s catching his breath. Thomas, who is graduating this month, finished school recently.

“I’m quite relieved that classes are over,” he said. “I have a trip to Brazil next week.”