What does it take to become an entrepreneur? The steps to get there would be certainly to develop a concept for a product or a service. Second, to talk to people about that concept. Now this is a little dicey because concepts are often stolen or imitated easily, so you want to be very careful about who you turn to for advice. But very frequently, the budding entrepreneur will gain financial support from family and friends to build a prototype, to find the first customer, to write a business plan. And with those developments, perhaps they can go to a venture capitalist to raise some serious money with which to hire staff and build out the business.
With venture capital money, typically that comes in waves. You raise two, three, four rounds of venture capital money and perhaps by that time you’re on your feet and self-sustaining and generating enough cash internally to carry your business forward. Or it might be possible you’d take your company public and raise money on the stock exchange or conceivably sell your company to a large corporation that could fund the growth of your company indefinitely into the future.
Those are the very broad strokes of steps to become an entrepreneur, and a successful one. But you should know that most entrepreneurs fail. Some astonishing figure like 70% of all new businesses fail within a short span of time – two or three years. And the chief reason is not that the entrepreneurs didn’t have desire or didn’t have a good idea, or couldn’t find a willing circle of customers, but the company simply ran out of money.
So the best thing you can do is to try to lock in place the resources necessary to sustain you through the startup phase, which is an extraordinarily risky moment. Now given those odds of failure, the best entrepreneurs tend to be people who have a stomach for risk. When you think about what it takes to be an entrepreneur, it takes guts.
In Their Own Words is recorded in Big Think’s studio.
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