Dileep Rao, a former venture capitalist, isn't celebrating the record $1.86 billion in venture money that flowed to Minnesota businesses last year.

He's also not enamored of the trend for contests and TV shows about the chase for investments. He doubts that the founders of Minnesota's biggest companies, such as Best Buy's Richard Schulze or UnitedHealth's Richard Burke, would have won any of them.

"There was nothing unique about their ideas," Rao said. "Their genius was in their strategy and skills to execute their strategy. And they just happened to build some of Minnesota's greatest companies."

Rao notes that the founders of Google, Apple and Microsoft avoided or were refused venture capital for years. They waited until they were large and powerful enough to control their own destiny.

Minnesota has had some VC-fueled winners over the last 20 years. However, most were purchased by other companies before they became the $1 billion revenue-and-market value "unicorns," such as United Health, Medtronic and Best Buy that Rao contends is the spine of a strong economy.

Rao, an engineer and Ph.D. in finance, taught at Harvard, the University of Minnesota and, most recently, at Florida International University. He worked 20-plus years in venture finance and economic development in Milwaukee.

In 2009, Rao wrote "Bootstrap to Billions." Last year: "Finance Secrets of Billion-Dollar Entrepreneurs." In it, Rao interviewed and analyzed the work and skills of Burke, Schulze, Medtronic founder Earl Bakken, Fastenal founder Bob Kierlin and others.

"These are the unicorn billion-dollar entrepreneurs … who [bootstrap-and-borrowed] from startup to more than $1 billion in sales and valuation … among the world's most successful entrepreneurs," he said.

Rao criticizes the motivation for VCs to gain disproportionate control and wealth for themselves and their investors, which leads them to drive companies to go public or sell to bigger firms.

And he explains the business-finance strategies that kept the successful founders in control; from friendly individual investors to various forms of debt finance, partnerships and capital-conservation strategies.

Rao said VCs fail to make money on eight of 10 ventures. So they need big success from the other two, something like 300%-plus returns to produce aggregate returns that surpass what investors can make in the stock market.

VCs generally invest after a startup company's potential is evident, he said. Entrepreneurs need to stay independent longer in search of greater long-term results downstream. That can be tough to do when VCs and investment bankers are dangling millions your way.

Jeff Hinck, managing director of Rally Ventures, which has offices in the Twin Cities and Silicon Valley, presents the counterargument. He said last year's 42% jump in VC investment in the state is great news for entrepreneurs of all stripes.

"VC-backed companies have been a driver of startup activity and job growth in Minnesota for decades," he said. "Current and former Rally Ventures portfolio companies such as Compellent, SportsEngine, Total Expert and others have created thousands of net new jobs in Minnesota. Former employees have created thousands more via new startups.

"There are also a number of current $1 billion-plus [market value] VC-backed companies headquartered here. Jamf, Protolabs, SPS Commerce and Sezzle to name a few. And companies that are sold generate executives and employees who know what it takes for a business to succeed. They pass on knowledge, which creates a more successful startup and economic ecosystem."

A local venture capitalist recently praised the University of Minnesota-sponsored Minnesota Cup sweepstakes that is the largest pitch competition in the country.

The U's business school since 2006 helped launch 165-plus startups, which have attracted $1.15 billion in capital. Seven went public since 2017.

Rao is watching. A grateful immigrant, Rao said he is an admirer of Mahatma Gandhi, the nonviolent father of Indian independence 70 years ago.

"The only reason [I'm] here and doing well is because of Gandhi," said Rao. "Independent India focused on education and developing its youth with world-class institutions."

Rao's book is a finalist for the Eric Hoffer Award, a prestigious competition named after the American philosopher for books published by academic and independent presses. Rao has aided our economy and sparked healthy debate.

Neal St. Anthony has been a Star Tribune business columnist and reporter since 1984. He can be contacted at nstanthony@startribune.com.