Dileep Rao financed the growth of more than 450 companies and real estate projects in more than two decades as a financier. In his newly published book "Nothing Ventured, Everything Gained," however, Rao sets out to demolish the "dominant myth" that building a giant company requires early stage venture capital.

The Twin Cities-based Rao, a clinical professor of entrepreneurship at Florida International University and formerly with the University of Minnesota, contends that entrepreneurs who avoid or delay getting venture capital can retain control of their company and more of the wealth it creates.

Rao, an entrepreneurial finance blogger for Forbes.com, bases his conclusion on interviews with hundred-million-dollar and billion-dollar entrepreneurs and analysis of the financial strategies of 85 of the latter.

Entrepreneurs, Rao argues, need sales and financial-management skills and innovation and takeoff strategies to develop companies without VC. Rao, whose book was published by Inc. magazine's imprint, cites examples ranging from Minnesotans such as Fastenal founder Bob Kierlin and Best Buy's Richard Schulze to "unicorn" entrepreneurs such as Jeff Bezos, Mark Zuckerberg and Steve Jobs.

Q: What's your primary message in "Nothing Ventured, Everything Gained"?

A: You don't need venture capital until you take off. That's what these entrepreneurs showed. You may need it afterward but not necessarily. The point is when does the rest of the world see potential? I call that the "Aha." VC works after evidence of potential. For instance, Mark Zuckerberg started Facebook in his dorm. When he got, I think, millions of users a month, that's when the angels from Silicon Valley swooped in and carried him to heaven, which is also known as Palo Alto. (Venture capital came later, Rao's book notes.)

Q: So after 23 years as a financier, you are telling entrepreneurs they do not need venture capital?

A: When we financed ventures, about 20 to 25 percent were in venture capital and equity. The rest were in debt and leases. The first few years (mid- to late-1970s to early 1980s) were pretty good in that Minnesota was in the top three in venture capital. Then you could start to see the momentum shift to Silicon Valley. That's why we toned down the VC and increased the lending and real estate. We are somewhere around 46th or 47th in venture capital now. It's pathetic.

Q: Why avoid venture capital?

A: I interviewed five billion-dollar entrepreneurs and analyzed a total of 85 billion-dollar entrepreneurs. Out of those 85, only 6 percent got venture capital early. Seventy-six percent of them never got venture capital and 18 percent got VC late. The 6 percent who got early VC were promoted up, let go or left the company. … VCs keep saying that one out of 100 that asks for VC gets it but not that many ask for VC. So about one out of a thousand ventures gets funded by VC; 99.9 percent don't. Out of the ones who do get funded, 80 percent fail. The net result is that out of 10,000 ventures in total, 9,998 don't benefit from VC. Two out of 10,000 do and they're mainly in Silicon Valley.

Q: Why is the failure rate so high?

A: I'm not against venture capital. I'm basically saying if venture capital went away from the hype of saying, "We can look at a business plan, we can look at a pitch book or we can listen to your elevator pitch and we can recognize genius" — if they went away from that, and they do that to justify their high salaries — I think they can have more great deals. The cream will rise. Those are the people I want to find. Because before they rise, I don't know who will succeed. You can't read potential in someone's eyes or a business plan. You can't see potential until it's proven. Nobody can. But I can see it in your history.

Q: Should entrepreneurs ever take financing?

A: Every kind of financing except the kind of financing where you lose control. If a venture capitalist comes to you like they did with Jan Koum of WhatsApp or like Mark Zuckerberg and they kneel before you and say, "Here's your money, give us whatever percentage you want to give us," take it, don't be stupid. Take the money. Keep control.

Q: How did the entrepreneurs who avoided or delayed venture capital build their companies?

A: They grew with skills, and that's what this book talks about, how do you get those skills. It also points out that the whole infrastructure of entrepreneurial education, venture development and incubators has a huge hole in it, a huge gap. The implied assumption is that the opportunity is all- important. VCs are more toward the opportunity. They want the next Medtronic pacemaker. Who runs it is not important because they'll replace the entrepreneur with a CEO. Work backward and you'll find that it's not the idea that builds a business; it's the entrepreneur who builds the business.

Q: What are you saying about entrepreneurial education?

A: It's gone off the rails because it focuses on the opportunity and not on the skills. If you're really going to do it you're going to teach them the skills, you're going to teach entrepreneurial finance, entrepreneurial marketing and sales, entrepreneurial operations. How do you operate a business without cash? How do you make your customers happy without capital? What we need to do is teach students in the engineering schools, in computer science and so forth how to sell, how to finance, how to grow without venture capital. You train them and all of a sudden you get a growth company. Then you give resources to them so they don't leave Minnesota. Better to keep these geniuses here.