Funding Entrepreneurs

At the key early stage of most breakthrough innovations, when innovative ideas are hardest to communicate and most widely doubted, the innovations will be largely self-funded through job income, mortgage loans, or family investments. Many examples illustrate early self-funding, including Walt Disney, Frederic Tudor, Soichiro Honda, Steve Jobs, and Harold Hamm. Self-funding remains important at later stages of growth of the entrepreneurial firm because it allows the original innovative entrepreneur to maintain the enough control to continue innovating. This is especially important for project entrepreneurs. Centrally planned funders, such as MITI in Japan or DARPA in the United States, are unlikely to be the main agents of breakthrough innovations. Self-funding is easier to achieve when taxes are limited. The garage is the symbol of the importance of self-funding, where the inventor does not need to ask permission to invent, and the entrepreneur does not need to ask permission to innovate.