Should the Entrepreneurial Development infrastructure, i.e., business schools, incubators, and area developers, focus on VC-based Entrepreneurship to boost an elite few or Unicorn-Entrepreneurship to benefit everyone?

Is Entrepreneurial Development wasting educational resources by teaching VC-based Entrepreneurship to entrepreneurs and students who need to know Unicorn-Entrepreneurship?

Entrepreneurial development today mainly teaches:

· Small business – but is a 4-year degree needed to develop a small business?

· VC-based Entrepreneurship, which assumes that VC is needed to develop growth ventures. Accordingly, many business schools teach innovation, viable products, business plans, and VC financing; and organize business plan or pitch competitions; and shark tanks.

But is VC-based Entrepreneurship the right direction, especially for the 99,98% who do not fit the narrow profile and requirements of the VC industry, and for the 100% who do not get VC before Aha, i.e., evidence of potential:

· VC is Capital-for-the-Privileged. It finances ~100/100,000 ventures and does so after Aha. Is Entrepreneurial Development missing an opportunity to teach everyone the skills to take-off without VC, as was done by 94% of unicorn-entrepreneurs? (The Truth About VC)

· VC has mainly worked in Silicon Valley. In an analysis of 85 billion-dollar entrepreneurs, 88 percent of those in Silicon Valley used VC. But most of them used skills to delay VC till after take-off. Should Entrepreneurial Development teach the skills and smart strategies to get to Aha?

· Outside Silicon Valley, 91% did not use VC. They used skills, smart strategies, and capital-as-a-tool, which works everywhere, and before and after Aha! Should Entrepreneurial Development teach the skills and smart strategies to grow without VC?

Entrepreneurial Development can do better by:

· Teaching capital-efficient Unicorn-Entrepreneurship rather than capital-intensive VC-based Entrepreneurship. With Unicorn-Entrepreneurship, entrepreneurs can learn to grow without wasting their time and opportunity seeking VC, only to be rejected. VCs reject about 98-99 percent of entrepreneurs seeking funds from them.

· Emphasizing skills – not ideas. Entrepreneurs need to get to Aha to be taken seriously. Unicorn-Entrepreneurs mainly got to Aha, and beat first movers, by using finance-smart strategies and skills.

· Encouraging capital-smart skills competitions rather than capital-seeking pitch competitions. Pitch competitions assume that smart judges can pick winners. But VCs, who are the smartest professionals in the startup business wait for Aha, i.e., evidence of potential, and then fail on 80 percent of their ventures. So why can pitch competition judges do better? Before Aha when no one can evaluate skills.

UE can spur successful venture growth everywhere, especially at business schools and community colleges that are not prominent on the VC radar. By teaching finance-smart skills, entrepreneurs can prove their potential based on real performance, not on pitch performance.

Making VC more accessible may only mean more VC losses. The top 3% of VCs are said to earn 95% of VC returns. To earn high returns, VCs need unicorns. Increasing the number of VCs and the availability of VC is unlikely to create more homeruns without developing more unicorn-entrepreneurs.

MY TAKE: If the goal is to create more unicorns outside Silicon Valley, and among disadvantaged communities and women-owned ventures, teaching Unicorn-Entrepreneurship can do more than more VC. Without Unicorn-Entrepreneurship, entrepreneurs could wait for capital that may never come, and squander the opportunity that has. If the goal is to build more unicorns, in all communities rich and poor, Entrepreneurial Development should stop promoting pitch competitions and start developing skills competitions. And universities outside Silicon Valley should stop following the Silicon Valley VC model popularized by Stanford and focus on training finance-smart entrepreneurs rather than instead of capital-intensive business plans.

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