Entrepreneur Myths

Table of Contents

• Introduction
  
• Entrepreneur Myth 1 | Entrepreneurs are born
  
• Entrepreneur Myth 2 | Education is critical to be a successful entrepreneur
  
• Entrepreneur Myth 3 | You must risk it all to make it
  
• Entrepreneur Myth 4 | You must have domain expertise to start a venture
  
• Entrepreneur Myth 5 | The best time to start a venture is when you’re young
  
• Entrepreneur Myth 6 | You’ll be your own boss
  
• Entrepreneur Myth 7 | Control is not an issue
  
• Entrepreneur Myth 8 | Failure is not an option
  
• Entrepreneur Myth 9 | Men are better entrepreneurs than women
  
• Entrepreneur Myth 10 | Married couples should not entrepreneur together
  
• Entrepreneur Myth 11 | Entrepreneurs have a balanced life
  
• Entrepreneur Myth 12 | If you fail, you can try, try again
  
• Entrepreneur Myth 13 | The journey is the reward
  
• Entrepreneur Myth 14 | Ideas are a dime a dozen
  
• Entrepreneur Myth 15 | All you need is a great idea in order to succeed
  
• Entrepreneur Myth 16 | Make it and they will come
  
• Entrepreneur Myth 17 | Ideas and ideation come through purpose or special intent
  
• Entrepreneur Myth 18 | You must be first to market
  
• Entrepreneur Myth 19 | The business plan is critical
  
• Entrepreneur Myth 20 | Sales projections are critical
  
• Entrepreneur Myth 21 | You must have an office
  
• Entrepreneur Myth 22 | You don’t need an attorney
  
• Entrepreneur Myth 23 | In business, most people tell the truth
  
• Entrepreneur Myth 24 | Competition is not important as long as you focus on your customer
  
• Entrepreneur Myth 25 | Getting distribution is easy
  
• Entrepreneur Myth 26 | The best exit strategy is an IPO
  
• Entrepreneur Myth 27 | Raising capital is easy if you have a great idea
  
• Entrepreneur Myth 28 | You have to “dress for success” when raising capital
  
• Entrepreneur Myth 29 | You need capital to develop your product or service
  
• Entrepreneur Myth 30 | Money grows on trees
  
• Entrepreneur Myth 31 | You can raise money overnight
  
• Entrepreneur Myth 32 | Dumb money is bad money, and smart money is good money
  
• Entrepreneur Myth 33 | Take the money, take the money and take the money
  
• Entrepreneur Myth 34 | The check’s in the mail
  
• Entrepreneur Myth 35 | Raising big money is harder than small money
  
• Entrepreneur Myth 36 | Investors are easily found
  
• Entrepreneur Myth 37 | OPM is the best way to fund your venture
  
• Entrepreneur Myth 38 | Angels are Angelic
  
• Entrepreneur Myth 39 | VCs are smarter than you
  
• Entrepreneur Myth 40 | Venture capital is risk capital
  
• Entrepreneur Myth 41 | Getting a venture capital meeting is easy because your idea is so great
  
• Entrepreneur Myth 42 | You can trust a venture capitalist
  
• Entrepreneur Myth 43 | Venture capital is the best way to fund your venture
  
• Entrepreneur Myth 44 | Sweat equity is extremely valuable
  
• Entrepreneur Myth 45 | Valuation is based on numbers
  
• Entrepreneur Myth 46 | Your employees understand your daily pressures
  
• Entrepreneur Myth 47 |Your employees will work as hard as you do
  
• Entrepreneur Myth 48 | Your employees are entrepreneurs too
  
• Entrepreneur Myth 49 | Your friends and family will be honest about your idea
  
• Entrepreneur Myth 50 | Family members make great employees
  
• EXTRA FUCKING BONUS | MORE MYTHS AT NO ADDITIONAL CHARGE
  
• Entrepreneur Myth 51 | Your partners are willing to share the same risk as you
  
• Entrepreneur Myth 52 | Equal partners do equal work
  
• Entrepreneur Myth 53 | Good partners are easy to find
  
• Entrepreneur Myth 54 | ‘Til exit do partners part
  
• Entrepreneur Myth 55 | Boards and advisory boards are critical to the success of your venture
  
• Entrepreneur Myth 56 | Venture capitalists are vultures
  
• Entrepreneur Myth 57 | A power law works in your favor
  
• Entrepreneur Myth 58 | You can’t build a billion dollar company overnight
  
• Entrepreneur Myth 59 | Bubblepreneur: Party like it’s 1999
  
• Entrepreneur Myth 60 | Pets@office is not professional
  
• Are you an entrepreneur?
  
• Should you start your venture?
  
• GLOSSARY | TERMS
  
• Chapter Notes
  
• Damir’s Recommended Book List
  
• Recommended media, blogs and other entrepreneur resources
  
• Mooladex
  
• Illustrations
  
• ABOUT THE AUTHOR
  
• ACKNOWLEDGEMENTS
  

DAMIR PERGE

ENTREPRENEUR
MYTHS

FORGET BUSINESS SCHOOL

GET A $50 MILLION EDUCATION FROM A STARTUP VENTURE CAPITALIST

Edited by Jana Arnold

AN ENTREPRENEURDEX BOOK

ENTREPRENEURDEX · DALLAS

entrepreneurdex

Publishers since 2011

Copyright ©2011 by Damir Perge

All rights reserved

Library of Congress Cataloging-in-Publication Data

Perge, Damir

Entrepreneur Myths: Forget Business School /

Damir Perge – 1
^st
ed.

Includes bibliographical references and index.

(1) Business (2) Entrepreneurship (3) Management (4) Investing (5) Capitalism

ISBN 978-1-61061-244-9

Entrepreneur Myths books are available for special promotions and premiums. For details, contact: Director, business development, entrepreneurdex, [email protected]

First published in digital format in 2011

entrepreneurdex Edition – 2011

Cover design by Chiko StatChimp

Cover photography by © Andreirybachuk | Dreamstime.com

WARNING: THIS IS THE UNCENSORED VERSION OF ENTREPRENEUR MYTHS, FOR CENSORED VERSION PLEASE SEARCH FOR THE FOLLOWING ISBN: 978-1-61061-604-1

For my parents, Mira and Ivan Perge, for having the courage to leave Yugoslavia and enable me the opportunity to become a capitalist

To my children, with love: Coby, Michael, Jon, Paige and Isaac

Introduction

Shit, I truly wish I’d had this book when I started out as an entrepreneur after dropping of out college my senior year.
Entrepreneur Myths
is for anyone who wants to become an entrepreneur, or is already an entrepreneur. Whatever your age or experience — there’s something you can learn based on my investing $50 million into startups.

After you read this book, I hope you’ll feel you got a $50 million MBA — avoiding the bullshit I went through. First, let me tell you an old, but true story.

IBM chief Thomas Watson was once asked whether he planned to fire an employee who made a mistake that cost the company more than half a million dollars. Watson shook his head, "I just spent six hundred thousand dollars training him. Why would I want anyone else to hire his experience?"

I spent close to $50 million investing into over 25 startups by applying the principles of complexity science. I founded the Tesla Capital venture fund and named it after the great Nikola Tesla. We managed the seed fund somewhat like a combination of Y Combinator and 500 Startups (before those two companies were in existence), but the process, principles and methods were different — we operated at a higher velocity with larger chunks of money. My partner in Tesla Capital committed to $100 million in funding, then came in $50 million short. It was a major clusterfuck. Obviously I learned not to make investment decisions based on
committed
capital but on
actual
capital in the bank.

I still believe in the power of applying complexity science to early-stage investing. And I plan to do it again under the entrepreneurdex business model — a venturcelerator. I coined the term “venturcelerator” for a different kind of combination of incubator and accelerator — a company using complexity science to fund and launch startups. Nothing teaches you like real-time, hands-on experience.

Watson was right. Why would he fire someone who just got a $600,000 education? The same applies here. Because I was a hands-on investor, I was in a position to clearly see patterns and myths about entrepreneurs. These entrepreneur myths cost me $50 million to learn. So you could say each of these 50 chapters is worth $1 million.

Background

I was infected by the entrepreneur virus at the age of 20. I wasn’t born to be an entrepreneur — my goal was to be a professional soccer player. Since then, I’ve gone through the entrepreneur journey quite a few times, learning by doing.

Wearing both the venture capitalist and entrepreneur hats, I see that entrepreneurs and investors have many ideas and practices that are just plain fucking fantasies, out-of-date dogma or misperceptions. They acquire these myths from the media, word-of-mouth from other entrepreneurs or from entrepreneur-published books that focus on the psychobabble aspect of starting a business.

You should read as many books as you can on business and entrepreneurship. But remember this: most books on entrepreneurship don’t focus on providing real world, real-time advice. They talk about the past rather than the current state of entrepreneurship.

Things move rapidly in the land of entrepreneurship. Look at the current velocity of high-valued tech companies in Silicon Valley and Silicon Alley. No one can predict how long it will last. But it proves the point that rapid innovation in the marketplace brings down existing beliefs about entrepreneurship.