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This paper investigates how the encouragement of entrepreneurship within university research labs relates with research activities, research outputs, and early doctorate careers. Utilizing a panel survey of 6,840 science & engineering doctoral students at 39 R1 research universities, this study shows that entrepreneurship is widely encouraged across university research labs, ranging from 54% in biomedical engineering to 18% in particle physics, while only a small share of labs openly discourage entrepreneurship, from approximately 3% in engineering to approximately 12% in the life sciences. Within fields, there is no difference between labs that encourage entrepreneurship and those that do not with respect to basic research activity and the number of publications. At the same time, labs that encourage entrepreneurship are significantly more likely to report invention disclosures, particularly in engineering where such labs are 41% more likely to disclose inventions. With respect to career pathways, PhDs students in labs that encourage entrepreneurship do not differ from other PhDs in their interest in academic careers, but they are 87% more likely to be interested in careers in entrepreneurship and 44% more likely to work in a startup after graduation. These results persist even when accounting for individuals' pre-PhD interest in entrepreneurship and the encouragement of other non-academic industry careers.