Travis Kalanick, the founder of Uber, recently offered entrepreneurs a provocative assessment of venture capital . According to Kalanick, a “super high bar” for a venture capitalist is to “do no harm.” He estimates that only about 10% meet that standard – and that only about 1% are actually helpful.

Don't ask whether VC is good or bad. Don't start by asking how to get VC.

You may do better by asking more important questions:

  • Can I grow more, make more, and keep more with VC? Late VC? Or no VC?
  • What can VC add, if anything?
  • Have I considered finance-smart strategic fits to grow more with less?
  • And if I need VC, when is the right time to use it? And from whom?

My research on billion-dollar Founder-CEOs suggests that these questions may be far more important than simply learning how to pitch investors.

Understand Why VCs may Not be Able to Help

The Chess Master: Kalanick compares the entrepreneur to the chess master playing the game and the VC to the chess enthusiast who periodically drops in to see how the game is going.

The entrepreneur lives with the venture every day – talking with customers, developing the product, watching competitors, hiring employees, managing cash and continually adjusting strategy. No VC or adviser can have the same depth of knowledge about every company in a portfolio

Founder-CEO Capability: Investing in companies and building them require different capabilities. Many VCs have never started, led or built a successful venture themselves. Their expertise may be valuable, but it is not the same as building the company every day.

This becomes particularly important in emerging industries where the winning strategy has not yet been established. If nobody knows which strategic fit will dominate, investors cannot reliably tell entrepreneurs what the answer will be. That is the Founder-CEO's, or replacement-CEO's, job.

The Need To Pivot: The first strategic fit is frequently not the one that ultimately works. Entrepreneurs who take early VC therefore face a particular risk: investors may not have the patience to finance the search when the original strategy does not deliver as expected. Very successful entrepreneurs, including Sam Walton, Bill Gates and Kalanick himself, had to pivot .

Wider Commentary About VC: Kalanick is not alone in questioning how broadly VC expertise translates into superior results. Former Benchmark partner Andy Rachleff has estimated that roughly 20 firms generate about 95% of VC industry returns. A 2026 NBER study found that 90% of VC investment profits were generated by just 5% of VCs. Marc Andreessen has similarly noted the extraordinary concentration of VC returns in a small number of home runs.

Develop Founder-CEO Capability to Become the “Chess Master”

The implication is not that entrepreneurs should ignore investors. It is that entrepreneurs need the capability to lead their ventures rather than expecting investors to do it for them.

Founder-CEOs need to identify emerging trends, find strategic fit, sell, finance their ventures, build organizations and eventually lead growth. Most importantly, they need to make decisions when there is no obvious right answer. Kalanick's analogy captures the distinction: The Founder-CEO needs to become the chess master. Capital cannot substitute for that capability.

Build Evidence Before Seeking VC

One of the most important ways entrepreneurs can improve their relationship with investors is by changing when they seek capital.

An entrepreneur with an idea needs money. An entrepreneur with evidence has options. Evidence can include paying customers, repeat purchases, attractive margins, an effective sales driver, demonstrated unit economics and signs that the business can grow — especially when positioned on an attractive emerging trend .

The more evidence entrepreneurs build, the less they have to rely on the pitch. In exceptional cases, the dynamic can even reverse: VCs pursue the entrepreneur, as they did with Jeff Bezos, Mark Zuckerberg and Jan Koum.

In my research, billion-dollar Founder-CEOs who avoided VC retained about seven times the share of wealth retained by those who took VC early.

Learn from the 94% who Delayed or Avoided VC

My research into billion-dollar 87 Founder-CEOs found a striking pattern.

  • Only about 6% used VC early.
  • About 18% delayed VC.
  • About 76% avoided VC altogether.

In other words, 94% delayed or avoided VC. This does not mean entrepreneurs should reject venture capital. It suggests something more useful: the foundational strategy of most successful Founder-CEOs in my research was to build their ventures without early VC.

Those who delayed VC could seek it after demonstrating more of their potential. Those who avoided it found other ways to finance growth.

But they shared an important advantage: they developed their ventures without becoming dependent on early VC. They optimized their financing strategy by deciding whether they needed VC at all – and, if they did, when to take it.

Understand the Price of Early VC – Dilution and Dependence

Venture capital does not just provide money and dilute the entrepreneurs’ share. It can also bring investors into the governance and strategic direction of the venture. That can matter enormously when the entrepreneur and investors disagree.

Kalanick knows this firsthand. Uber raised billions while he was CEO and became one of the most valuable private ventures in the world. But after a highly publicized boardroom battle, Kalanick was pushed out as CEO.

Yet Kalanick is not telling entrepreneurs never to raise VC. He advises them to become good enough at fundraising to create competition among investors and improve their terms.

The Real Divide: Not Founder-CEO versus VC but Dependence versus Choice.

Early-stage entrepreneurs often have to take the capital and investors available to them. Founder-CEOs who build evidence and negotiating leverage have a better chance to choose the capital and investors that fit their strategy.

Kalanick's own experience illustrates the difference. As he recently observed, when you are young and unproven, you work with whoever is willing to work with you. After demonstrating success, you gain something entrepreneurs often lack at the beginning: the leverage to choose whom you work with.

The objective is not to get VC. It's to optimize VC if needed – using the right VC, at the right time, when its value exceeds its cost and risk in dilution, control and strategic freedom.

Use VC as a weapon – not as a crutch.

Delay VC when Delaying Improves Your Position

Entrepreneurs are frequently encouraged to raise money as soon as possible. But earlier is not necessarily better. If entrepreneurs can reach meaningful milestones without VC, they may demonstrate customer demand, refine their strategic fit, prove their sales driver, and improve their economics. And they may discover that they don't need VC at all.

If they do need VC, they may be able to approach investors with more evidence, credibility and negotiating leverage. Or the VCs approach them.

So don't simply ask, “How can I raise VC?” Ask: “What should I prove before raising VC so that the capital adds more value than it costs me in ownership, control and strategic freedom?”

Optimize VC: Learn From Dell And Zuckerberg

VC can be extraordinarily valuable for capital-intensive ventures competing in rapidly scaling emerging markets. For others, it may be unnecessary.

Michael Dell developed a different business model for personal computers by selling customized PCs directly to consumers. Customer payments and vendor financing helped fuel growth, allowing Dell to build and control his company.

Mark Zuckerberg took a different path. He accepted VC after building leverage and structured control so that he maintains extraordinary influence over the company.

Different financing strategies but the same underlying question: How can financing help the Founder-CEO maximize the venture's potential while preserving as much ownership and strategic control as possible?

VC is expensive. But there is another issue entrepreneurs should consider: VC risk.

Early-stage VCs are commonly estimated to lose money on a large majority of the ventures they finance, with a small number of home runs generating much of a fund's returns. Entrepreneurs therefore face not only the risk inherent in their venture, but the additional risks from choosing the wrong investor, taking VC too early, or accepting terms that restrict strategic freedom.

This creates two important questions for entrepreneurs.

  • Can I eliminate VC risk by avoiding VC – and grow?
  • If I need VC, am I getting the right capital, from the right investor, at the right time – to maximize potential while minimizing dilution, risk and loss of control?

MY TAKE: Kalanick's claim that only 1% of VCs are helpful will undoubtedly generate debate among venture capitalists and the entrepreneurship ecosystem. But entrepreneurs should ask a more important question: How do I optimize VC?

The capability to reach takeoff without VC may be even more important for entrepreneurs outside the major VC centers, where venture capital may be scarce or access to top-tier VCs may be limited.

This also suggests that entrepreneurial ecosystems should not optimize for raising capital – instead they should optimize for helping entrepreneurs grow more, make more and keep more by building:

  • Capability: Developing Founder-CEOs with the skills to start, build and lead ventures.
  • Capacity: Building institutions capable of developing those Founder-CEOs.
  • Capital : Designing institutions to provide the right financing at the right stage.

Capital should support entrepreneurial capability – not substitute for it.

Avoid VC when its cost and risk exceed its value.

Delay VC when evidence can improve your leverage.

Use VC when its incremental value exceeds its financial and control costs.

The objective isn't to get VC. It's to develop the Founder-CEO Capability to optimize VC.