Delivered November 21, 2025 @ 12:00pm ET

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Table of Contents

• 4 Forms of Entrepreneurship

  • 1. Entrepreneurship by Innovation

  • 2. Entrepreneurship by Imitation

  • 3. Entrepreneurship by Acquisition

  • 4. Entrepreneurship by Licensing / Franchising

My name is Gerry Hays, Founder & CEO of Doriot® (pronounced “Doe-ree-oh”), named after French-born American U.S. General Georges Doriot, the father of Venture Capital. I’m also an author (First Time Founders’s Equity Bible), inventor (U.S. patents for ads on t-shirts, coat checking, and VentureStaking® - pending), and 21-year professor of venture capital and entrepreneurial finance at Indiana University.

Democratize Venture is my platform to explore the venture markets and share the insights, strategies, and frameworks I bring into the classroom. It’s also a way for me to share principles of prosperity — because at the end of the day, venture is a pathway to prosperity.

4 Forms of Entrepreneurship

This past week, in a class discussion, a student shared that she wanted to be an entrepreneur - but felt held back because she “didn’t have an innovative idea.” That remark sparked an interesting conversation about what entrepreneurship is: organizing resources to deliver a product or service that solves a problem.

In that light, you don’t always need to invent something never seen before. What matters is seeing a meaningful gap or need, then putting together people, skills, capital, systems and execution to fill it.

Here are the four broad forms of entrepreneurship — along with examples — and what resources & skills each tends to involve.

1. Entrepreneurship by Innovation

Yes, this form starts with an original idea (a new product, service or business model) that wasn’t available before or significantly changes what existed. This is high risk because you may be creating both market and product from scratch. But also high reward, since you can capture first‑mover advantages or build new categories. Think about about OpenAI, a game-changing innovation.
Resources & skills needed: Strong vision, R&D (or creative/technical development), marketing to educate the market, risk capital, resilience. Innovation at scale is very hard and extremely expensive.
Pro Tip: You have to be driven by a future you want to see versus the allure of making money.

2. Entrepreneurship by Imitation

This is where entrepreneurs adopt or adapt a business model that already works—possibly in a different market or with slight improvements. This is how most companies start. For example, Mark Zuckerberg created Facebook, but he didn’t invent the internet or social media. MySpace and Friendster came before him, but he built a better mousetrap. It’s lower risk (you’re building on something that’s already proven to work), but it still requires strong execution and category-level innovation to stand out from what already exists.
Resources & skills: Ability to recognize a successful model and adapt it to a new market or context. And frankly, this is an easier sell to potential investors. Not that it will be easy to raise capital, just less friction because it doesn’t require investors to use their imaginations as much.
Pro Tip: If you don’t have a radical new idea, that’s okay. Ask “Which business model elsewhere impresses me — and could it work here (or in this niche) with adaptation?” and “How will I adapt it to this context to make it relevant?”

3. Entrepreneurship by Acquisition

In this form, an entrepreneur grows by acquiring an existing business (or its assets), then building, improving, or scaling it. You’re stepping into something that already has customers, cash flow, and infrastructure—but with room to grow or fix what’s not working. There’s even a growing funding model called a Search Fund, where investors back individuals—often first-time CEOs—in their search to buy and operate a small to mid-sized business. It’s a smart path for those who have leadership chops but would rather scale something solid than start from scratch.
Resources & skills: Capital (often more, because you’re buying a business), due‑diligence skills (to assess the business you’re acquiring), change‑management skills (to improve it), strategic vision for growth.
Pro Tip: If you go this route, make sure you really love the business—enough to dive in and learn every part of it. Building a company is hard, but messing one up is surprisingly easy. If you’re not all-in, acquisition can become a quick path to burnout or bad decisions.

4. Entrepreneurship by Licensing / Franchising

In this form, the entrepreneur obtains rights (a license) to use someone else’s intellectual property, brand or business model — or grants those rights to others (if you’re the franchisor). It’s a lower‑risk way to operate because some of the brand, know‑how or business model is already proven. But there may be less flexibility, higher fees/royalties, and less control.
Resources & skills: Capital for the license/franchise fees, operational discipline (you may have to conform to standards), customer service, marketing within the franchise or license rules.
Pro Tip: You have to be willing to follow clear instructions to make sure the business runs by design, not by guesswork. At the end of the day, you’re playing with someone else’s ball and bat—so there’s less room to freelance or bend the rules.

Putting it all together
Millions of potential young entrepreneurs will navigate one of these pathways (or combinations of them). Choosing your path matters because each calls for different types and levels of capital (money, time, skills, networks) and different attitudes toward risk, control and creativity. Here are some quick comparison questions your readers might ask themselves:

• Do I have a brand‑new idea (Innovation) or am I more comfortable adapting something proven (Imitation)?

• Am I looking to build from scratch, or buy an existing business (Acquisition)?

• Do I prefer to operate under my own model or buy into a proven model/licence (Licensing/Franchising)?

• What resources (funding, skills, mentors, systems) do I already have, and what will I need?

• How much risk am I willing to take — and how comfortable am I with uncertainty vs proven setups?

Closing thought
The student’s comment that she didn’t have an “innovative idea” is totally valid — and actually a helpful starting point. Because entrepreneurship doesn’t only demand a radical idea. It demands insight into a problem + willingness to organize resources and execute. Start by understanding which form of entrepreneurship you’re drawn to can help you move from “I don’t have an idea” to “Here’s how I can proceed.”

Wishing you a focused and fulfilling weekend and special time with family and friends over the Thanksgiving holiday. We’ll be back in a couple of weeks.