The VC-method to build a growth venture is to come up with an idea, develop a plan and a pitch, go to a pitch competition or an incubator, seek access to angels and find angel capital, launch the venture, and get venture capital (VC). The VCs then hire a professional-CEO in up to 85% of the ventures, after which the investors exit the venture through a strategic sale or via an initial public offering (IPO) if the venture is successful.
This VC-method helps about 20 out of 100,000 ventures and was used by about 6% of billion-dollar entrepreneurs (Truth About VC).
Unicorn-Entrepreneurship: How Billion-Dollar Entrepreneurs Took Off
Among 85 billion-dollar entrepreneurs, who built companies with sales and valuation of more than $1 billion from an idea, more than 9 out of 10 took off without VC. 18% of them got VC but stayed as CEO. 76% avoided VC. Those who delayed VC kept 2x the proportion of wealth created compared with those who got VC early, and the VC avoiders kept 7x.
These 94% of billion-dollar entrepreneurs used Entrepreneur 360 skills, i.e., 9 skills (each skill representing 40 degrees) they needed to grow from idea to billions. The set of skills include 6 skills to takeoff with control of the venture, and 3 skills to scale up from takeoff to dominance.
Skill #1 to Skill #5 to Takeoff without VC
You may not want to build a unicorn, but if you want to build a growth venture and control it to keep more of the wealth created, these 6 skills can help.
Skill #1. Technical skills in an emerging industry.
Nearly every entrepreneur from Sam Walton (Walmart) and Bill Gates (Microsoft) to Mark Zuckerberg (Facebook) and Travis Kalanick (Uber) had the technical skills to start a venture in an emerging industry. Sometimes it is possible to find the right partners, like Jobs and Chesky did, but without the tech skills, you may be left behind.
Skill #2. Sales skills for the emerging industry.
There are 2 main ways to sell in a new venture – with lots of capital, or with skills and little capital. Most billion-dollar entrepreneurs from Dick Schulze (Best Buy) to Joe Martin (Boxycharm.com) had skills to sell with little capital.
Skill #3. Venture (not corporate) finance skills to maximize productivity per dollar.
94% of billion-dollar entrepreneurs took off without VC. They knew how to use each dollar to grow and launch their unicorn. This is what entrepreneurs like Niraj Jain (Wayfair) did.
Skill #4. Venture financing skills to raise capital for an unproven venture, to keep control, and to reduce dilution.
To keep control of their venture, billion-dollar entrepreneurs need to know how to finance growth and keep control. That is what entrepreneurs like Michael Bloomberg (Bloomberg) had.
Skill #5. Bootstrap strategy skills to find the key weapon to succeed and bootstrap elsewhere.
Finance-smart billion-dollar entrepreneurs knew how to grow more with less and build a real unicorn by using their edge to dominate and by bootstrapping elsewhere. That is what Bob Kierlin (Fastenal – Bootstrap to Billions) did.
Skill #6. Bootstrap launch skills to takeoff with a limited runway.
The most difficult phase of a venture is to takeoff with limited capital. These skills involve finding the right sales driver, growing at the right speed, and controlling the industry. That is what Richard Burke (UnitedHealthcare – Bootstrap to Billions) did.
3 Skills from Takeoff to Unicorn.
The next 3 skills to build ventures from takeoff to dominate include:
· Control skills to monitor your growing venture.
· Organization skills to build a competitive business.
· Leadership skills to dominate your industry.
The Final Degree: Entrepreneurship 361
Luck. Success in an evolving industry requires more than just skill; luck plays a role. Without at least a stroke of luck, you might find yourself competing with entrepreneurs like Bill Gates, Jeff Bezos or Elon Musk.
MY TAKE: Finance-smart billion-dollar entrepreneurs acquire 360-degree skills to start growth ventures, build strong companies, and lead them to dominance. These skills are the building blocks for successful and sustainable ventures where you control the business and the wealth created.