Technology Entrepreneur's Guidebook

During the last class session, we finally discussed the first few pages of The Technology Entrepreneur's Guidebook. More specifically, we looked over the first few pages of Entrepreneurship by Reggie Aggarwal and Mark Esposito. I had some difficulty finding the link to the book on Professor Fry's website, but I managed to finally find it and print it out. This short section was somewhat of an intro to the rest of the book and opened with some interesting but alarming facts. I almost feel like it was a "Debbie-Downer" "Negative-Nancy" way to start the book. The authors list 5 facts about entrepreneurship, which are listed below:

1. 1 in 6,000,000 high-tech business ideas end up in an IPO
2. Less than 1% of business plans received by VC's get funding
3. Founding CEO's usually own less than 4% of this company after an IPO
4. 60% of high tech companies funded by VC's go bankrupt
5. Most high tech companies that successfully have an IPO take 3-5 years

After reading these facts, it almost seems like I have a better shot of hitting it big by winning the lotto than successfully starting my own high-tech firm. These facts surprise me somewhat, but at the same time, not really. We all hear about the Bill Gates, Steve Jobs, and Mark Zuckerberg's of the world, but think about all the people that failed at becoming an overnight success and were never heard of. Truthfully, who doesn't want to become a multi-billionare? For example, Kaleil and Tom thought they were going to be the next big thing and it almost seemed like they might get there when watching StartUp.com. Of course as we all know, they didn't and the entire life cycle of GovWorks.com was a little over a year.

Since our class is concerned with starting up a business and not specifically in the technology sector, I would like to believe that the success rate of a typical business (non tech business) might be a little better. I feel that the high-tech industry is a high risk, high return type of business and from the perspective of a venture capitalist, I may fund 20 companies where 19 fail, but that 1 success will cover the money spent on all 20 of those start-ups. With that being said, I would like to see some facts about a typical business and their success rates. I think I've heard from somewhere that 90% of businesses fail within the first year. This isn't much better than the facts stated above, but I like a 10% success rate over an almost certain failure rate of a high tech company.