Key Factors for Starting-Up

Self-sufficient, highly educated, and willing to forgo a salary (for years) are just a few of the traits of this year’s crop of Inc. Magazine’s 500 Founders.

fm Inc.com Zine 9/15 enhanced by Peter/CXO Wiz4biz

Why? 51 % of Inc. 500 CEOs said they chose entrepreneurship, because it suits their skills & abilities. Recent research by Gallup & Inc magazine shows that those traits include a much higher than average level of determination, strong work ethic, & willingness to take on new challenges.

Q1. Who? As you were growing up, which members of your family were most influential to you becoming an entrepreneur? Father 31% – no one else was close.

Q2. When? How old were you when you started your first business?
5 – 19 years old, (26%), 20 – 29 (42%), 30 – 39 (22%) = 90%

Q3. Edu? What level of education have you achieved? HS – 12%, College 46%, Business School 21% = 80%

Q4. Serial “E”. Is this the first company you have started? Yes 40%, No 60%

Q5. How many? If no, how many others have you started? 1 – 24%, 2 – 24%, 3 – 18%, 4 –12% = 78%

Q6. Fail? Have you ever started a company that went out of business? Yes 24%, No 76% = 100%

Q7. Founders. 57% of Inc. 500 CEOs told us they are company Founders, while 36% said they are part of a Co-Founding team.

Q8 Friends & Family. 43% of Inc. 500 co-founders started their company with a close friend. Only 14% of co-founders said they started their company with a family member.

Q9 Who are your primary Customers? Large companies 41%, Small to midsize companies 48%, Consumers 34%

Q10 Local Ties. 44% of Inc. 500 CEOs said college or family, were the biggest factor in deciding where to locate the business.

Q11 Pre-Existing Customer Base was the biggest reason (30%) of where they located their company.

Q12 How much $$ did you use to start your first business? < $5,000 49%, $5,000–$9,999 9%, $10,000–$49,999 17%, $50,000–$100,000 10%, > $100,000 15%

Q13 Skin in the game by 71 % of Inc. 500 CEOs – who started their business with personal savings. They went to great lengths to preserve their financial autonomy.

Q14 Have you ever turned down Venture Capital [VC] funding? Yes 38%, No 14%, never offered or asked 48%

Q15 Why were you turned down by VCs?
a) VCs = ??? “Often, VCs have no idea what really drives your customers and your business, but they think they do or want you to think they do. So they flex their muscles, exert pressure or push for short-term profits, and make bad business decisions.” DANIEL SIEGEL Safe Passage Neuro-Monitoring NO. 291
b) Choice. “We are 100% self-funded. It’s something we are extremely proud of, but more important, it’s given us the freedom to shape the company the way we’ve always imagined.” KOBY KASNETT AppEagle
c) Different Mission. “I enjoy the flexibility to be creative & influence the culture of our business – which may not be shared by a VC fund whose primary purpose is financial ROI.” LEE CARROLL Blue Companies
d) Staying Debt-free. “ I have had no need for it. I believe in staying debt-free as long as it is possible.” CHRIS JONES Plant Therapy
e) Freedom. “Often times, you lose the freedom that you became an entrepreneur for in the first place.” DANNY DeMICHELE Elevated.com
f) Fit or give you fits? “We didn’t believe a VC partner was the right fit for us. We were looking for someone who really understood our space and would provide strategic advice, not simply capital.” JESSE PUJJI Am-push

Q16 Patience. 24 % of Inc. 500 CEOs waited three years or more, to take a paycheck from their new company. “Successful people find a way to get comfortable and thrive in the midst of uncertainty,” said Kamakshi Sivaramakrishnan, CEO of Drawbridge.

Comments: Do you have any interesting Factors you’d like to share?