When David defeated Goliath, he used only a sling and some stones. Leveraging his skill and focus, David aimed his stones at the right spot and the rest is history. Entrepreneurs today launching start ups are finding that venture capital makes them vulnerable like Goliath while mental capital makes them agile and effective like David.
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January 18, 2006
Weston, MA - Entrepreneur start ups seeking venture capital are less likely to create billion dollar businesses than start ups that focus on 7 key tasks based on a new study.
Most of the top performers were begun by an entrepreneur as a start up. The majority of these top-performing former start ups never relied on venture capital. Examples include Clear Channel Communications, Paychex, Virgin Group and Wal-Mart. Their beginnings were often humble. Sir Richard Branson dropped out of high school to start Virgin. Tom Golisano started Paychex in a one-room office with two colleagues.
Instead of venture capital, the entrepreneurs focused their start ups on 7 key tasks:
* Creating a major new market or expanding an old one by 20 times
* Reducing the costs of customers and beneficiaries to use the start upís offerings
* Adding customers 20 times faster than competitors at low cost
* Improving the start upís business model at least every four years
* Employing a business model that didnít require much external equity capital
* Building a management team deep in innovation, operations, finance and marketing
* Searching to find out what they didnít know that they didnít know.
Donald Mitchell noted: ďVenture capital is expensive because investors are seeking huge gains. Fields that attract venture capital soon have too many competitors. Venture capitalists are quick to fire entrepreneurs who fail to meet their business plan goals. Firms without venture capital learn how to create leaner, more competitive businesses that can become highly prosperous.Ē
A press conference for members of the media will be held at 4 p.m. EST today, January 18, to discuss this research and how entrepreneurs can build their businesses more successfully. To register for this press conference, send an e-mail before 4 p.m. EST today to e-mail protected from spam bots and directions to join the call will be sent to you. Label your e-mail subject as "Entrepreneur Lesson Press Conference".