Chapter 1 Select the Right Growth Track

Question 1

What are the two methods to build giant ventures?

Answer 1

1. Capital-intensive, venture capital method
2. Capital-efficient, billion-dollar-entrepreneur method

Question 2

What percentage of entrepreneurs benefit from the capital-intensive method?

Answer 2

0.02 percent

Question 3

What do entrepreneurs need to link for take-off without VC?

Answer 3

Business and finance

Question 4

What do venture capitalists provide to startups?

Answer 4

Funds in exchange for equity

Question 5

What is the ‘Aha’ moment for venture capitalists?

Answer 5

When a venture’s potential is evident

Question 6

How many ventures do VCs typically reject?

Answer 6

99 out of 100

Question 7

What are the four types of Aha?

Answer 7

1. Previous-unicorn Aha
2. Opportunity Aha
3. Strategy Aha
4. Billion-dollar-leadership Aha

Question 8

What is a Previous-unicorn Aha?

Answer 8

When an entrepreneur with a history of building a unicorn seeks VC

Question 9

What characterizes an Opportunity Aha?

Answer 9

VCs see evident billion-dollar technology potential

Question 10

What is a Strategy Aha?

Answer 10

When an entrepreneur’s growth strategy becomes evident

Question 11

What is a Billion-dollar-leadership Aha?

Answer 11

When an entrepreneur’s leadership skills and venture potential are evident

Question 12

What percentage of billion-dollar entrepreneurs get VC after reaching Aha?

Answer 12

24 percent

Question 13

What strategies do finance-smart entrepreneurs use to take off without VC?

Answer 13

Optimum combination of internal and external financing

Question 14

What is the impact of linking business and finance for entrepreneurs?

Answer 14

Reduces or postpones financial needs

Question 15

What happens to most VC-funded ventures?

Answer 15

80 percent fail

Question 16

What is the success rate of VC-funded ventures in Silicon Valley?

Answer 16

90 percent

Question 17

What is a capital-intensive growth track?

Answer 17

Using capital-intensive strategies and seeking VC early

Question 18

What is a capital-efficient growth track?

Answer 18

Building businesses without VC

Question 19

What characterizes a hybrid growth track?

Answer 19

Combining capital-efficient and capital-intensive strategies

Question 20

What did Pierre Omidyar do with eBay?

Answer 20

Started with personal savings and sought VC later

Question 21

How did Michael Dell fund his company?

Answer 21

Using cash from customer orders

Question 22

What did Bill Gates use to build Microsoft?

Answer 22

Fees from licensing the operating system

Question 23

What is a common misconception about VC?

Answer 23

That entrepreneurs need VC to build a big business

Question 24

What is the role of angel investors?

Answer 24

Individuals providing capital for early-stage startups in exchange for equity

Question 25

Fill in the blank: The __________ method is capital-efficient and allows entrepreneurs to maintain control.

Answer 25

billion-dollar-entrepreneur

Question 26

True or False: Most billion-dollar entrepreneurs seek VC before proving their potential.

Answer 26

False

Question 27

What are the three growth tracks for billion-dollar entrepreneurs?

Answer 27

1. Capital-intensive 2. Capital-efficient 3. Hybrid

Question 28

What is a key lesson for entrepreneurs regarding VC?

Answer 28

You will not get VC before evidence of potential

Question 29

What does the capital-efficient track allow entrepreneurs to do?

Answer 29

Stay private or go public while maintaining control

Question 30

Who built Facebook?

Answer 30

Mark Zuckerberg

Question 31

Where was Facebook built?

Answer 31

In his dorm room at Harvard

Question 32

What type of initial capital did Zuckerberg use to start Facebook?

Answer 32

Capital from family and friends

Question 33

Who were some of the early investors in Facebook?

Answer 33

Silicon Valley angels, including Peter Thiel

Question 34

What type of capital did Zuckerberg accept after Facebook took off?

Answer 34

Angel capital

Question 35

What did Zuckerberg obtain to maintain control of Facebook?

Answer 35

Proxies to vote the shares of the VCs

Question 36

What are finance-smart entrepreneurs?

Answer 36

Those using capital-efficient or hybrid growth tracks

Question 37

What is finance-smart entrepreneurship?

Answer 37

The expertise to build and control a dominant business by avoiding or delaying VC

Question 38

How has the public image of entrepreneurship been affected by venture capital?

Answer 38

It has been hijacked by venture capital

Question 39

What is required to attract VC funding according to the text?

Answer 39

Proving your business strategy's potential

Question 40

What is the challenge of maintaining control of a venture when seeking VC funding?

Answer 40

You are unlikely to keep control until you have proven your leadership potential

Question 41

What do entrepreneurs need to know to bridge the VC gap?

Answer 41

How to get alternate capital

Question 42

What should entrepreneurs aim to achieve with limited capital before seeking VC?

Answer 42

Get to Aha

Question 43

What has VC created in Silicon Valley?

Answer 43

One of the greatest groups of growth companies

Question 44

True or False: Many entrepreneurs have gained significantly from VC.

Answer 44

False

Question 45

What are some questions raised about VC in the text?

Answer 45

How has VC done outside Silicon Valley? How have billion-dollar entrepreneurs grown outside Silicon Valley?