Takeoff Without VC: Why 94% of Billion-Dollar Entrepreneurs Do It
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Can you grow and takeoff without venture capital (VC)? This is the question every entrepreneur should be asking. You spend the same amount of time building a small business as you do a growing venture. Can also go towards growth. And 94% of billion-dollar entrepreneurs took off without a VC and took control of the venture and the wealth created. Takeoff can happen even without VC.
The real question that entrepreneurs should be asking should be how to grow without VC because:
99.9% of entrepreneurs don’t attract VCs. If they want to grow, they need to know how 94% of billion-dollar entrepreneurs took off without a VC.
Getting VC is not a panacea. 80% fail in this.
There is another significant advantage to flying without a VC – you can say you have control of your venture and the money generated. This is compared to 30% – 75% of VC-funded ventures where the founder-CEO is replaced.
If entrepreneurs get VCs too early, the VCs take control, find a new CEO, and undermine the entrepreneur. Among the 22 billion dollar entrepreneurs, VC delayers held a 2x ratio of wealth created. VC escapees kept a 7x ratio to wealth created.
But can you learn to fly without a VC? If you rely on the Entrepreneurial Education Ecosystem (EEE) that includes business schools, incubators and the assorted mentors and mentors, you will be taught the VC-model, which is capital-intensive and helps about 20 out of 100,000 ventures. Its concepts include:
First-mover products that believe it’s important to be first. But first-movers only dominate about 1 in 10 times.
Minimum Viable Products, which may help you start your venture but may not be sufficient to be successful.
Business model, which does not assess the capital efficiency of the enterprise.
18% of the 85 billion-dollar VC delayers and 76% of avoiders used the unicorn-entrepreneur-model. UE-Model harnesses the skills and finance-smart business strategies of billion-dollar entrepreneurs to take off without VCs. You too can learn these skills and strategies and watch your enterprise grow with your control, and keep more of the wealth you create.
Here are 6 unique aspects about the UE model.
#1. Unicorn-Entrepreneurship is based on how unicorn-entrepreneurs actually build their ventures, not the assumption created by the entrepreneurship education ecosystem that entrepreneurs need a capital-intensive VC-model to build their growth venture .
# 2. Unicorn-Entrepreneurship is based on the strategies and skills that were actually used by Unicorn-entrepreneurs to find the right Product-Segment-Industry-Sales-Driver edge for high growth with low capital. Michael Dell focused on selling customized PCs to customers who wanted to buy directly from him. This strategy allowed them to bypass retail channels, sell directly to consumers, achieve higher margins, and reduce their inventory needs. Joe Martin learned to use the right sales drivers to sell cosmetics to consumers and created a unicorn.
#3. Unicorn-Entrepreneurship shows how to develop and perfect a competitive strategy. As Joan Magretta said, “A business model describes how your business is run, but a competitive strategy describes how you will do better than your competitors.” Entrepreneurs need a competitive strategy in order to beat direct and indirect competitors and grow. After you have developed your unicorn strategy, you can present it to investors on a paper.
#4. Unicorn-entrepreneurs used the finance-smart UE model and skills to take off without VC. VC is very limited and rationed to very few people, most of whom are from elite institutions. Skills are not limited to UE models.
#6. Unicorn-entrepreneurship is based on balancing intellectual smarts and street smarts. Successful entrepreneurs don’t need to be intellectual elites from Harvard and Stanford. Sam Walton (Walmart) went to the University of Missouri. Dick Schultz (Best Buy) didn’t go to college. Michael Dell (Dell) dropped out of the University of Texas. Joe Martin (Boxycharm.com) graduated from Florida International University. These entrepreneurs combined smarts, skill, and strategies to create and control unicorns.
My Tech: Entrepreneurial Education would do well to re-examine its assumptions and ask itself whether it has really “researched” why it focuses on a VC-model that serves the 0.02% of entrepreneurs and not UE -On the model that can help 100. % of entrepreneurs.
Developing High Potential Ventures with FIU Skills – Not Venture Capital Harvard Business Review What is the business model? From Forbes Over $375 to the Latest Unicorn in Beauty: How Jo Martin Built Boxycharm.com Without VCB by Dilip Rao