Can you grow and takeoff without venture capital (VC)? That’s the question every entrepreneur should be asking. You spend the same amount of time building a small business as you do for a growing venture. Can also go for growth. And 94% of billion dollar entrepreneurs go without VC and keep control of the venture and the wealth created. Can also takeoff without VC.
The real question entrepreneurs should be asking is how to grow without VC because:
· 99.9% of entrepreneurs do not attract VC. If they want to grow, they need to figure out how 94% of billion dollar entrepreneurs left without VC.
· Getting VC is not a panacea. 80% fail here.
· Going without a VC has another important benefit – you can say you are in control of your venture and the wealth created. This compares to 30% – 75% of VC-funded ventures where Founder-CEOs are replaced.
· If entrepreneurs get VC too early, VCs take control, find a new CEO, and dilute the entrepreneur. Of the 22 billion dollar entrepreneurs, VC delayers retain 2x the proportion of wealth created. Those who avoid VC retain 7x the proportion of wealth created.
But you can figure out how to takeoff without VC? If you rely on the Entrepreneurial Education Ecosystem (EEE) that includes business schools, incubators, and various consultants and mentors, you will be educated by the VC-Model, which is capital intensive and helps about 20 out of 100,000 ventures. Its concepts include:
· First-mover products, which assume that being first is key. But first-movers prevail only 1 in 10 times.
· Minimum Viable Products, which may help you start your venture but may not be enough to succeed.
· The Business Model, which does not evaluate the capital efficiency of the venture.
18% of the 85 billion dollar entrepreneurs who delayed VC and 76% who avoided it used the Unicorn-Entrepreneur-Model. The UE-Model uses skills and financial savvy in the business strategies of billion dollar entrepreneurs to scale up without VC. You’ll also learn these skills and strategies and see how far your venture can grow, under your control, and keep more of the wealth you’ve created.
Here are 6 unique aspects about the UE Model.
#1. Unicorn-entrepreneurship is based on how unicorn-entrepreneurs actually build their ventures, not on the assumption that the entrepreneurial education ecosystem has made entrepreneurs need the capital-intensive VC-model to generate their growth venture.
#2. Unicorn-entrepreneurship is based on techniques and skills that unicorn-entrepreneurs have actually used to find the right product-segment-industry-sales-driver edge for high growth with less capital. Michael Dell focuses on selling customized PCs to customers who are willing to buy directly from him. This strategy allowed him to bypass retail channels, sell directly to consumers, earn higher margins, and reduce his inventory needs. Joe Martin learned how to use the right sales drivers to sell cosmetics to consumers and build a unicorn.
#3. Unicorn-entrepreneurship shows how to develop and validate a competitive strategy. As Joan Magretta says, “a business model is a description of how your business operates, but a competitive strategy explains how you can do better than your rivals.” Entrepreneurs need a competitive strategy to beat direct and indirect competitors, and grow. After developing your unicorn strategy, you can present it on a sheet of paper to investors.
#4. Unicorn-entrepreneurs used the finance-smart UE Model and skills to takeoff without VC. VC is very limited and rationed to very few people, most of them from elite institutions. Skills for the UE model are not limited.
#6. Unicorn-entrepreneurship is based on balancing intellectual talents and street smarts. Successful entrepreneurs don’t have to be intellectual elites from Harvard and Stanford. Sam Walton (Walmart) went to the University of Missouri. Dick Schulze (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 intelligence, skills, and strategy to create unicorns and control them.
MY PAKE: Entrepreneurial education better re-examine its assumptions and ask itself if it really “researched” why it focuses on the VC-Model that serves 0.02% of entrepreneurs and not on the UE-Model that can help 100 % of entrepreneurs.