Thursday’s incredibly exciting news that the Senate approved H.R. 3606 - the Jumpstart Our Business Startups (JOBS) bill - should hearten all that grasp the negative impact of the tangling knot of regulation on the flow of capital and the success of entrepreneurship in America today.
Included in the bill is H.R. 2930 - the Entrepreneur’s Access to Capital Act - which for the first time legalizes investment-based crowdfunding.
This is game-changing as startups and small businesses and investors can now directly (and socially) connect and transact investments in amounts as little as $500.
Correspondingly, these Internet-marketed, transacted, and settled offerings will be exempt from the Byzantine state-by-state rules that effectively prevent a regulatory compliant securities offering for anyone with less than a $100,000 legal budget.
The combined effect of these law and rules changes - once they wind themselves through the economy - will be powerfully transformative.
How much so?
Well, at a crowd-funding and private capital conference I attended last week, David Weild, former Vice Chairman of NASDAQ, and one of the most informed and respected observers of the US IPO market, made the startling observation that if the regulatory environment for IPOs and for venture capital and private equity financings was as it was in the late 1990s that the nation's joblessness rate - as opposed to being its current 8+%, would be less than 3%, or above the level of full employment.
As exciting, the amazing, networked power of crowdfunding will usher in a true golden age for U.S. startups.
What would this look like?
Well, try on for size quick and efficient financing for any project, any product, any company that a thoughtful and passionate entrepreneur, artist and/or cause-oriented activist can dream up.
And correspondingly, how about freedom for all those with the gumption to go for it to not to have to stay in a job they don't like just to pay the bills?
How about everyone - for the first time in the history of any society – living and working at the top of the hierarchy of needs and be about - and only about - self-actualization and causes larger than themselves?
In the words of the famed social scientist, Daniel Pink, how about all of us leading professional lives of full autonomy, mastery, and purpose?
Am I overstating the impact of one bill?
Am I not speaking to and about its drawbacks, especially to the dangers of fraud and to investor protection of the regulatory loosening?
No, I don't think so.
Smart people like David Weild, Vince Molinari, Michael Moe, Phil Reicherz, Dara Albright, and many, many others agree that fixing and updating for the Internet age the broken regulatory framework for our private and public equity markets is in the top 3 to 4 of all government levers to transform our economy for the better.
It is not as much a question of whether or not these law and rules changes will have this kind of impact, only of how long it will take.
So for those of you that despair for the fate of our world and of the inefficacy of our government and political systems, hold on just a little longer.
The arc of human progress is about to take a major upswing.
I can't wait.
Next week: Winners and losers in this new and coming frictionless financing and crowdfunding world.
Funding is the lifeblood of any small business. And it's getting tougher to find these days. Banks have become more vigilant about lending, and the vast majority of venture and angel funds are reserved for tech companies with big growth potential. The result is that far too many entrepreneurs can't start or grow their ventures—and can't provide jobs and new products and services to spur our economy.
Letting small companies sell equity stakes online would be a huge boost to those firms—like angel investing on steroids. The businesses would get access to tens of millions more potential investors, and could reach out to them at little or no cost through online outlets like Facebook. Then, if the companies won funding, they'd get a built-in base of customers who were strongly motivated to help the brand succeed.
Broadening the Base
Currently, equity-based crowd funding falls under strict Securities and Exchange Commission rules governing angel investing. That hinders broad-based online fund raising in a couple of ways.
First, the SEC largely limits private-equity investments to accredited investors—those with $1 million or more in net worth, among other tight standards. Only 35 nonaccredited investors are allowed to buy private equity in a company's offering. Second, the SEC prohibits general solicitation or advertising of the equity being sold. Unless the entrepreneurs or small-business owners have a pre-existing relationship with the angel investors, they can't try to sell them equity.
If equity-based crowd funding were legalized under the current proposal, those two limits would go away. So, entrepreneurs and small-business owners could target a much wider range of investors—say, for the sake of argument, the 51.7 million U.S. households with household income of $50,000 or above. And they could reach out to potential investors through venues like social networks that cost basically nothing and provide a global reach.
Raising money from a crowd provides other powerful advantages to companies. If a company raises crowd-funding money, it implies that there's real demand for its offerings. If not, most likely there's no demand, and an entrepreneur is spared the opportunity cost of starting the business (and then seeing it fail).
Likewise, equity-based crowd-funders are more likely to become loyal customers, as they have a vested interest in seeing the company succeed.
Crowd funding holds a big advantage for the funders, as well: It lets them participate in angel investing, whose returns have outpaced every other significant asset class over the past decade.
A Guiding Hand
Critics raise lots of objections to the idea. For one, they say companies need the help that seasoned investors can bring. But if companies need guidance, they can take on experienced managers or a board of directors. And raising money from a crowd initially doesn't preclude getting angel investments down the road. Lots of companies launch with credit cards, for instance, then make a name for themselves and catch the attention of angels and venture investors.
Further, critics argue that if companies must raise funds from a crowd, there are better ways to go about it, such as soliciting donations or raising debt capital instead of equity. But there isn't a strong enough inducement for people to donate; even if you offer them some reward, it won't be as enticing as equity. As for debt capital, there's a potential problem: It doesn't allow businesses the grace period they need to start building the company. Instead, they'd have to start paying it back right away.
Critics also see red flags for the investors. Among other things, they argue that crowdfunded companies won't be as carefully vetted or transparently documented as traditional ones. So, they say, lots of companies looking for money will be particularly risky bets for investors—if not unscrupulous operators that solicit funds and then vanish.
What's more, critics say, equity in privately held companies is nearly impossible to sell, except when the company itself is acquired. This may take many years, or never happen at all.
These concerns have merit. The answer, as with any investment, is common sense: People need to be aware that they may very well lose their money. They should do as much research as possible and protect themselves by holding a portfolio of investments, not staking everything on one company.
That approach will become more viable as more crowd-funding platforms are built and it gets simpler to track down investment targets. Those platforms will, hopefully, also introduce safeguards against fly-by-night fraudsters, such as background checks for entrepreneurs and business owners who solicit funds.
None of those concerns are a reason to block equity-based crowd funding. Whatever the risks of the approach, the economic effect it can have on America is much more profound.
This article was written by David Lavinsky, President of Growthink, and appears in today’s Wall Street Journal.
Jim Stengel’s powerful new book, "Grow: How Ideals Power Growth and Profit at the World’s Greatest Companies", is a clarion call for all those that ask and seek a lot from the companies they work for and the companies they buy from.
Stengel’s great credibility comes from both his remarkable career - where he rose through the ranks to become Proctor and Gamble's global marketing officer, arguably the biggest marketing job in the world with a $9 billion marketing budget responsibility for famed P&G brands like Crest, Duracell, Gillette, Pampers, and Tide.
And it comes from a study that he commissioned with the brand research firm Millward Brown where they sought to correlate a business’ financial performance with "the kind of bonds that people form with its brand."
Stengel and Millward Brown surveyed brand equity data on over 50,000 brands around the world and identified those with the highest "loyalty, or consumer bonding score."
They ended up identifying fifty brands, from Accenture, Amazon, and Apple, to Visa, Wegman's and Zappo's that scored highest on attributes like "eliciting joy,” “enabling connection,” “inspiring exploration,” “evoking pride,” and “impacting society."
With the caveat of letting skeptics dig into the numbers and methodology before getting overly excited, Stengel’s study found that between 2001 and 2011 these 50 high “human attribute brands” financially out performed the S&P 500 by 395%!
Whether these findings can be replicated or not, what certainly remains is Stengel’s inspirational message that great businesses - in their highest form – are about far more than the bottom line.
They are, for their finest and best practitioners, nothing less than noble causes that are better described in poetry than prose.
Google “immediately satisfies every curiosity,” IBM "builds a smarter planet,” Redbull "uplifts mind and body,” Moet “transforms occasions into celebrations” and Zappos' purpose is to “deliver happiness.”
Stengel’s overriding point is not that idealistically languaging and approaching your business will make you more money, but far more viscerally that doing so is the high value in and of itself toward which all organizations should strive.
And, of course, it can't be just words and platitudes.
Every day the leaders of a business are challenged to choose between their various dancing devils and their better angels.
But, to those that consistently stay on the high plane, or at the least, that catch themselves quick when they fall off...
…well they are the ones that deserve both our admiration and thanks for the inspiration they bring to our workday world.
And, if the results of Jim Stengel’s study hold up, our investment backing too.
This past week, I had the great fortune to attend the TED conference.
TED, for those that don't know it, is a great annual gathering of thought, business, and political leaders, of techno-optimists, and of passionate and decidedly idealist change agents from around the globe.
Past speakers at the conference have included Bill Gates, Bill Clinton, Jane Goodall, Malcolm Gladwell, Sergey Brin, educator Salman Khan, and many Nobel Prize winners.
The slogan of TED is “ideas worth spreading,” and they are probably doing a better job of it than any other organization in the world.
Over 1,000 “TED Talks” are available for free downloading on the organization's website. Amazingly given their often highly intellectual content, the talks have been translated into more than 81 languages and viewed in aggregate more than 700,000,000 times.
At this year's conference, the presenters included Peter Diamandis, Founder of the X Prize, Jim Stengel, former Head of Global Marketing for Procter & Gamble, T. Boone Pickens, and Reid Hoffman, founder of LinkedIn.
For my TED week, the story that resonated most was shared by David Kelley, founder of the legendary Palo Alto design firm IDEO, whose many design feats include the first mouse, the first PDA, and Steelcase’s Leap Chairs.
My favorite fun fact about IDEO – not only is it consistently ranked by BusinessWeek as one of the world’s 25 most innovative firms but most years it does consulting work for the other 24 companies in the top 25!
David’s talk was about creative confidence - how within all of us lies breakthrough, innovative thinking and doing that just sometimes needs a little push and inspiration to become real.
He shared the story of Doug Dietz, a General Electric engineer whose life work had been the design and manufacture of magnetic resonance imaging (MRI) machines.
David told of how Doug had been visiting a hospital when he saw a little girl crying, waiting to have her MRI done.
He asked the attending nurse if this was typical, and was shocked to hear that more than 80% of all children getting MRI scans needed to be sedated.
He went back to GE dismayed - thinking of all of the children that were having such harrowing experiences, and how the machines he had helped design and build had had a hand in causing.
Doug, under David’s guidance, reframed the problem as a creative challenge, and re-imagined the MRI experience for children - believe it or not - as a pirate adventure.
Well, how about painting the entire exam room in tropical collages, and giving the children adventurer costumes instead of pale hospital gowns?
And, in the tour de grace, the formerly foreboding MRI machine itself reimagined as a pirate ship - with the children guided to stay quiet and still as they “went aboard,” so as not to wake the pirates!
The result - sedation rates dropped from 80 to less than 10 percent, along with massive time and money savings of removing the need for anesthesia.
This is TED - entrepreneurial, creative thinking and acting to make the world a healthier, wealthier…
…and more thoughtfully designed and kindfully entertained place - one child at a time.
Over the last three weeks, we have shared the lessons of liquidity, of outliers, and of leadership and luck we've learned from the stories of the extraordinary returns earned by Facebook's early investors.
But what about when things don’t work out?
When our early-stage private equity investments are stuck in illiquidity?
When growth is not progressing on that hoped for outlier path?
When the invested-in company - in spite of its leaders’ best efforts - just keep getting hit over the head with big, gooping dollops of bad luck?
What - in these oh so frustrating circumstances - is an investor to do?
Well, the first place to start is to recognize - for better or for worse - that this is the typical scenario.
The vast majority of companies are not Facebook, and the vast majority of investments of course do not have multi-thousand percent returns in just a few short years.
While most investors recognize this point intellectually, emotionally it is often a far different story.
This dichotomy flows from the basic nature of most entrepreneurs and of the fundraising process.
For starters, entrepreneurs are optimists of the highest order. It is what makes them special and why we love them so.
Then, the process of raising money for a company is fundamentally a sales undertaking.
One where the entrepreneur's fundamental optimism is combined with the necessity of promoting - with great persistence and passion - the brilliant investment prospects for his or her business.
From this highly positive charged state, money is invested and expectations are set high.
And then, real life and business return.
Characterized of course more often than not by long slogs. By unforeseen obstacles. And by just plain old - fashioned bad luck.
And investors naturally become disappointed, impatient, and often angry, too.
And then, for better or for worse, they often lash out at their once so-favored entrepreneur.
These of course are not pleasant emotions, but a key purpose they can serve is to test the entrepreneurs mettle.
As investors make their frustrated voices heard, how does the entrepreneur react?
Is he or she defensive? Defiant? Pollyanna? Inaccessible?
Is he or she able to channel the frustration into positive, moving forward energy?
Into - as is often found in the highest character entrepreneurs - a deeper, abiding, and more sober commitment to make investors whole?
Quite simply, is he or she able to stand in the center of the storm and keep both feet firmly planted on the ground and eyes firmly fixed on the prize?
When the heat is turned up high, the entrepreneurs that behave like this…
…well they are the straws that truly stir the drink of our capitalistic economy.
Very rarely because of simple probabilities will they build a Facebook.
And they won't be successful with every company they lead.
But with them, the odds are well in investors' favor of doing far better than average.
So when investing times get tough - as they often do - discovering that you have backed an entrepreneur like this is the kind of luck that every investor hopes and deserves to have.
Over the last two weeks, we have discussed the lessons of liquidity, sector, and outliers to be learned from the extraordinary returns earned by Facebook's early investors.
Now let's turn to the only topic that self-interested and red-blooded investors really care about when it comes to Facebook and its IPO.
Which of course is, how the heck can they get a piece of a company like Facebook before it becomes, well, Facebook?
Well, the painful answer is that for almost everyone - it just isn’t going to happen.
The reasons for this go beyond the obvious one of rarity - Facebook being the biggest business story of the new century, and correspondingly having one of the steepest valuation growth trajectories of all time.
And it goes beyond the fact that like so many of the great investment stories of the past 15 years - PayPal, YouTube, Zynga, LinkedIn, Yelp - Facebook’s early investors primarily came from a very small group of interconnected Silicon Valley investors.
No, the heart of the “find the next Facebook” challenge is that the vast majority of investors are either too poor or - more interestingly - too rich to even consider an investment like Peter Thiel’s $250,000 into Facebook in 2005.
Let's start with being too poor.
Forget about deal access and acumen.
Forget about taking the measure of the entrepreneur and just feeling it in “your bones” that he or she has the right stuff.
Forget all that and just deal with the fact that 99%+ of all investors are just too illiquid to write a $250,000 investment check to a private company.
And for those that do have the means, the vast majority are not okay with the very real likelihood that they might lose every last solitary cent of their very hard - earned (or at least hard inherited) cash.
Now, if it is any consolation, so too are the very rich mostly closed off from early-stage private investing.
This is because most of the “real” investment capital in the world today is in the form of professionally managed funds with sizes greater than $100 million.
So when the managers of these funds look at a company at Facebook’s 2005 stage of development, it is just hard for them to visualize how a 6 or low 7 figure investment could possibly “move the needle” of their overall fund return.
And oh yes, most fund managers – because of their career experiences, education, and mindset – are also so painfully lacking in the imagination, technological sophistication and general “hipness” that when presented with a paradigm-shifting business model like Facebook…
…they just don’t get it.
So if neither the rich nor the poor can do it, and if all of the best deals are snatched up by the Silicon Valley Technocrati anyway, what about the rest of us?
Well, at the start, recognize that, in a capitalistic economy, early -stage private equity investing is both the most exhilarating and the most vexingly challenging of all business undertakings.
It requires a full internalization of the Serenity Prayer:
God, grant me the serenity to accept the things I cannot change,
Courage to change the things I can,
And wisdom to know the difference.
Wisdom is needed to know when one is in over their head and that the prudent course is to not invest no matter how tempting.
Serenity is needed once an investment is made, as its destiny rests equally in the hands of the entrepreneur and in those of Fortuna – the Roman goddess of good fortune and luck.
And, of course early-stage private equity investing requires heaping platefuls of courage and guts.
And when stormy weather comes as it always does, courage’s cousin grace is needed.
To remind us that the only ships that never sink are those that never sail.
The biggest technology IPO in history has rightfully captured the imagination of both the general and investment public.
However Facebook's stock ultimately performs, what is written is that those that invested in the company in its early days made one of the most incredible angel investments in history.
As a private company, Facebook has been not obligated to disclose the exact prices at which it sold shares in its early financing rounds.
However, both by pretty simple math and disclosures by the principals involved, we can pretty much deduce both the percentage and real dollar return of some of Facebook's earliest investors.
Most famous among them is Peter Thiel, who we know in 2004 invested $500,000 into Facebook at a valuation of approximately $4.9 million.
Facebook S-1 filing shows him now holding 44,724,100 shares of Facebook Class B stock - which at the estimated $41 price at which the stock is expected to go public - would be worth more than $1.8 billion.
For those scoring at home, that represents more than a 36 thousand percent return in 7 short years.
Now, first of all I think anyone who has ever made an investment of any kind - whether it be in real estate, in the stock market, in a commodity, in a private company - that doesn't read that and not admit to at least to a little level of jealously and sense of the unfairness of it all…
…well, I would say that person is either lying, in denial or is just plain discouraged by this now 13-year “lost decade” of investing return that almost everyone that did NOT invest in Facebook has experienced.
So once we put this natural (and may I add wholly unproductive) emotion aside, the thoughtful angel investor should both gain great hope and powerful moving forward lessons from the Facebook IPO.
The first lesson is sector.
Professor Scott Shane, one of the world’s foremost researchers on angel investing returns, makes the simple but crucial point that when it comes to making quality early-stage private company investments, technology is king, queen, court and everything in between.
How important is it to have one’s investing focus be tech?
Well, Professor Shane estimates that the return expectation differential between an investment in an early stage, privately-held high tech company and one in a low tech company to be as much as 20x!
How can you make this work for you?
Well, a simple shorthand to use is the “TechCrunch” test – i.e. whatever sector that most famous technology blog is writing about is a pretty good bet that there is also a LOT of smart angel investment money pouring into dynamic companies in it.
These days that includes social networking, gaming (mobile and otherwise), healthcare information technology, personal and business productivity software, entertainment convergence, and of course all things Apple.
This points to a second Facebook IPO lesson for investors, namely liquidity “signaling.”
Sites like SharesPost and SecondMarket have become famous for their active and decent bid and ask spreads on high profile and cleanly capitalized tech companies like Twitter, LinkedIn, Zynga and Groupon, among many others.
How these markets might fundamentally transform private equity investing for the better in the years to come is a story for another day, but for now the intelligent angel investor can view shares trading on these markets as great “acid tests.”
Simply asking the question of whether or not the shares of a private company could ever reliably trade - i.e. generate buying interest - on a popular trading market is a great signal as to the quality of and the prospects for the investment.
Folks, we're just getting started.
Next week, we'll discuss an angel investment lesson from the Facebook’s IPO so powerful that a whole multi-billion dollar industry is springing up around it.
When I think of the great entrepreneurs that I've been blessed to get to know personally over the years, Mr. Martin Tibbitts truly stands out.
Marty, as the Founder and CEO of the BOSS family of businesses, has both built and acquired an impressive array of companies - ranging from telecommunications to security software, to web services and analytics, to digital media.
What stands out about Marty for me above all is his beautiful entrepreneurial mind.
Extremely well-read and with a wide array of personal, athletic, and intellectual passions and experiences, Marty is the master of the "non-obvious."
He is able to connect the strategic dots between industries, market and competitive trends with a creativity and panache that can only flow from a lifelong passion for the game of "business chess."
This ability to visualize the impact of small moves here and there - like securing an incremental cost advantage - and then translating those advantages slowly but surely into a strong competitive position - well this is an essential quality of great business strategy and one that Marty possesses in buckets.
As a successful “real world” entrepreneur, however, Marty’s skills go well beyond strategy.
He also possesses great heaping platefuls of business guts.
Unlike far too many educated at America's most prestigious universities (and Marty is a proud Stanford graduate), Marty's career has been defined by the paths not taken.
No law school or business school for Marty. No safe corporate training or analyst programs early in his career.
Heck, to the best of my knowledge Marty has never had a job in the traditional sense of the term in his whole life!
Marty began his career in straight commission sales and by his late twenties had already started and failed at three or four businesses before finally laying the groundwork of the Telco company that would be his first big success.
These early life experiences - especially the failures - incurred in him the core and so inspirational mindset that the unforgivable sin in modern business is not coming up short in one's pursuit of the brass ring.
But rather it is that so depressing combination of over-conservatism, nay-saying, and settling for just getting by that unfortunately plagues way too much of American business.
And what really inspires me - especially when I compare Marty to so many of our Stanford peers that took the “safe” career road - is not his personal economic success, however impressive that might be.
It is not the fact that he has probably paid 100X, 500X, 1,000X of the local, state and federal taxes of the “average” American.
It's not even the hundreds (if not low thousands) of jobs his companies have created over the years - and the families that those jobs have supported in the depressed Detroit metropolitan area where his businesses are headquartered.
No, while all these accomplishments are impressive and worthy of praise and admiration for sure, what really turns me on about Marty Tibbitts and what I see as the core driver of his entrepreneurial success is that he has had - and still has in buckets - the courage to act on his creative convictions.
And an entrepreneurial and business lifetime of so thinking - and so acting - well that is a career, and a life, worth living.
Last week, I wrote about the personal transformation I experienced at a very intense strategic advisory board session earlier this month.
And about how when the heat got turned up and all the pleasantries were stripped away, what was distilled were the real strategic, tactical, leadership, and management challenges that I and my company face.
It was one of those intensely memorable “crowded hours” of life and business that when in the midst of it, feels as if life and one’s perspective on it will never be the same again.
And then Monday morning comes.
And half your team is late for the meeting.
And that big prospect all of a sudden stops returning your calls.
And the e-mails stretch on for as far as the eye can see.
And all that great insight and momentum to think, act, and be “big” creeps down just a few critical notches.
So we start to ask – was all that hard and courageous work and introspection for naught?
For sure, the vast majority of businesspeople rarely if ever subject themselves to the white heat of a hard, intense and brutally honest strategic planning session and/or leadership assessment.
So those that do so automatically raise themselves into a far more exclusive, high growth mindsetted group.
But the great ones - when Monday morning comes - take that next crucial step.
They know that backsliding is the fatal entropy of business and must be fought and overcome daily.
And they understand that exceptions and let-downs anywhere so dangerously lead to exceptions and let-downs everywhere.
So when those “ah-ha” moments start to fade, as they inevitably do, catch yourself.
Stay true to your best self. To your mission.
To those childhood imaginings of the possibility filled world that can be.
It is just that when you are all grown up that you have to look a little harder, dig a little deeper to keep them alive.
And, on Monday mornings, those that do….
Well, they are the brave, inspirational souls - in the famous words of Thomas Paine – who deserve the love and thanks of man and woman.
The so famous and always timely Gandhian creed of “be the change you seek in the world” is never more relevant than when it comes to what entrepreneurs must do to get better in order to lead profitable enterprises and to fulfill on the mission and promise of their organizations.
I experienced this first hand at my company’s quarterly advisory board meeting this past week.
While we are proud that Growthink’s revenues grew 30% in 2011, the complexity of our business model - with a mostly Internet marketing-based publishing “front-end” meshed with a strategic advisory and venture investing “back-end” - has long been a point of spirited discussion as to how to best organize and lead it.
And as the company’s CEO, I was unluckily (or luckily, depending on one's perspective), the focal point of the debate.
I was challenged by our board for, among other things, not clearly enough defining and measuring the business’ key metrics, to not delegating effectively and often enough, to leading in a too "cliché - driven" fashion, to not taking care of myself, to the simple but highly relevant feedback as to my moderation style of the board meeting itself!
The sessions were painful. They were discouraging. They were sometimes anger and soul-search inducing.
And they were wonderful.
It is way too rare in business and in life - especially as an entrepreneur attains a base level of success and/or as they get older - that they are truly challenged and called out on their shortcomings.
Rather, in our politically correct culture, the default is too often to take the “everyone gets a star on their forehead and trophy” approach.
While there is a LOT to say for a kudos - based company culture and leadership ethos, it has its drawbacks.
It can excuse lack of performance and it can lead to a false sense of “faux” accomplishment.
Most insidiously, lack of “tough love” can impede that creativity inducing state of introspection - and even depression - from which often flow breakthrough ideas and profound transformation.
Call them what you will, but these kinds of in-person business “interventions” can propel more strategic and professional growth than a countless thousand e-mails, tweets, texts, and status updates ever can.
Now, the flip-side is that the executive has to be open to this feedback and be fervently committed to an ongoing personal and professional growth mindset and approach.
You see, while life and business VERY occasionally give us savants with so much of the right leadership and management stuff that they succeed in a linear growth fashion, the vast majority of entrepreneurs learn to get better through failing and through crisis.
And in modern business, these crises almost always come unpredictably.
And they are sometimes of such a severity that while wisdom - inducing for sure can also be so debilitating as to impede forward progress for years.
Far more controllable and repeatable are the “manufactured” crises of a board meeting, of a strategic planning process, of a business coaching and mentoring dynamic.
Look for entrepreneurs that are open and expose themselves to these kinds of sessions regularly.
Even better, look for those that once given the goods on what they're doing wrong and why, go out and do something about it.
Like growing themselves and their organizations to all they can and should be.