Building a company is a not merely a byproduct of having a good idea. It is a separate, specific, labor-intensive, time-intensive, money-intensive, and attention-intensive act.

Since I work with start-up companies and technology-based companies, I am very often approached by potential clients who are experienced, talented researchers or executives who recognize a gaping hole in the product line their companies currently offer, or who see how to adapt a process used in one field to address a significant problem in another.

They want to know if they can get venture capital funding to go develop the product, go to market, meet the market’s need for this missing element, and in the process build a company that they own significant portions of, and thereby become wealthy.

If things were that easy, many more of us would be wildly rich.

Venture capital investors want large returns on their investments, and to get those large returns, they need to invest in fast growing companies.

The basic formula for fast growing companies are companies (a) that have a new product, (b) that will be the dominant producer of that product, (c) that are selling the product into a new market that is rapidly growing, or that are selling the product into an existing market and taking away the market share from existing players.

Venture capitalists love ideas. They love even more developed ideas that have already turned into products, because that means that founders have removed the risks associated with product development, such as the classic “we-thought-we-could-make-the-product-do-that, -but-we-were-wrong-because-we-violated-a-fundamental-law-of-physics” hurdle.

Most of all, they love developed ideas that have turned into products that customers are already buying because that means that company has removed the risks associated with marketing a product such as the ‘We-have-developed-software-that-works-betterthan-anything-that-Microsoft-has, -except-all-the-world-already-uses-Microsoft-and-does-not-want-to-change advertising dilemma.

So even though venture capitalists love ideas, they typically don’t love them in that deep abiding way that involves writing checks to the person with the idea, just on the strength of the idea alone.

This means that the person with the idea will need to team up with someone who has company-building experience. Venture capitalists, in the end, don’t invest money with ideas or with companies—they invest with individuals who can be trusted to spend the investment money wisely in developing the company.

Beyond that, the idea and the product has to relate to a giant market that can support fast growth for the company. A product that serves only a small market may be a great product, and the people who use the product may cherish it dearly, but there won’t be enough revenue thrown off from the product to make the company founders or the investors wealthy

Venture capital gets talked about frequently, but there are really very few companies that are appropriate venture capital targets. If the products and the company are not targeted for high growth markets, with a management team that has a high-growth orientation and background, venture capital financing is out of the question.

A great idea might be reduced to a practical application, and patented, and the patent could be sold or licensed, without the need to form a company or undertake the effort or capital outlay involved in setting up a company.

For many inventors, it is far more practical to have an invention be developed by an existing company. That existing company will already have a workforce, as well as manufacturing, sales, marketing and distribution personnel and assets in place, and setting up those kinds of assets is a significant job.

Inventors who want to become the next Bill Gates or Larry Ellison need to ensure that they have not only a great invention, but all of the additional personnel, and all of the personal traits or determination and perseverance, and the markets and the financial backing, to make a product the foundation for a great company.