Invisible Capital Reveals The Resources That Builds Success

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Appropriate can be a funny word.  The word suggests knowing something before tacking action.  And in business, appropriate decisions are needed to be successful. 

If you’re in business and seeking perspective on how to build a business properly, reading the book Invisible Capital: How Unseen Forces Shape Entrepreneurial Opportunity by Chris Rabb is very appropriate.

Even Rabb’s background is appropriate, for this book’s theme. Currently on assignment at Temple University, Rabb is a writer, consultant, and speaker on numerous topics related to entrepreneurship, media, civic en­gagement, and social identity.  He’s been highlighted on programs such MSNBC’s Up with Chris Hayes.  Note: You can watch the program featuring Rabb alongside JJ Ramberg at the end of this review (also read Ivana Taylor’s great review of JJ’s book It’s Your Business).

Rabb’s management of entrepreneurial programs for a business assistance program in an underserved neighborhood, along with research from sources such as the Kauffman Firm Survey and the Panel on the Study of Entrepreneurial Development (PSED), forged his examination of the resources that make or break business success.

I spoke with the author via phone after a friend’s Facebook connection, and I connected with the values he presents whether on news programs or in print: Entrepreneurs must constantly assess their regular connections and how those connections are deployed as capital necessary to success.

Why Knowing “Who Did It” Is Important

If you followed the controversy about President Barrack Obama’s “You Didn’t Do It” comment regarding business owners, you’ll appreciate what this book sets out to explain.  Written well before the debate, the book notes that many concepts of entrepreneurship are overemphasized.

Rabb feels that the U.S. is facing “entrepreneurial illiteracy”—a lack of meaningful insight among ordinary people becoming entrepreneurs as well as the leaders who promote entrepreneurship.

“Too many think tanks and business books act as if all it takes to achieve entrepreneurial success is to follow the Yellow Brick Road of hard work. Make it to Oz and, like Dorothy, you will get what you want….It’s time to pull the curtain aside and see how invisible capital really works. Entrepreneurs need this knowledge to build their own success. Moreover, our communities need this knowledge to understand how our fragile economy actually works—and what can help where we need help the most…”

Invisible capital is defined as a set of tactical assets that works for a given organization.  The book details those assets, the:

“. . .influences the quality of entrepreneurship experienced by new and prospective practitioners who may have the necessary passion and perseverance, but lack the insight and perspective to adequately gauge the terrain they must navigate as entrepreneurs and business owners.”

Rabb reviews these influences, highlighted by data and studies.

Chapter 2 gives a brief overview of the composition and performance of U.S. businesses. Chapters 3 and 4 connects and contrasts how invisible capital operates with American society’s appreciation for “striking out on our own in search of greater independence and good fortune.”

For example, the way minority and women owned businesses are defined by federal programs can blur how invisible capital access remains lopsided for many of these businesses.

Develop An Economy That Creates True Strategy For Entrepreneurial Growth

Rabb’s belief “to inventory what you already have, and to learn what you need” manifests in the solutions and support suggested in Chapters 5 and 6. Rabb makes clear that policies should discern beneficial economic development from simple adoption of individual beliefs that do not leverage resources and encourages the entrepreneurial illiteracy about developing resources.

Rabb supports Druckers’ differentiation of an entrepreneur vs small business, and from there the text expands the thesis.  For example, Rabb shows a figure that notes the diminishing chances of a U.S. start up existing 10 years and achieving over $100,000 net per year:

“But the statistics tell a more sobering story, which means that some large percentage of new entrepreneurs are not just overly optimistic, they’re absolutely clueless, and thus inordinately ill-prepared for their journey. They literally don’t have a clue because few people in the average entrepreneur’s sphere are in a position to alert them to the unseen forces that shape entrepreneurial opportunity—in particular, those things that will significantly boost their chances of achieving even modest success in business.”

Now this sounds like a fall-of-the-American-way-of-life tone, but Rabb’s true belief in a person’s capability in acquiring invisible capital balances that tone.  The capacity to collectively make better choices about our capital is achievable, and Rabb speaks loud and clear to that objective:

“First, we can help prospective and nascent entrepreneurs build invisible capital—particularly those who are drawn to commonwealth entrepreneurship. Second, we can shed light on those aspects of invisible capital that promote enduring inequities that are not born of anything within any individual entrepreneur’s control.”

Answers for each economic segment are not detailed, but Invisible Capital does enlighten many books in which detailed solutions are presented, such as that in David Gladstone’s Venture Capital Investing.  The ideas about capital combined with the historical aspects makes the investment questions raised in Gladstone’s book more poignant.

Reading Invisible Capital will challenge you to examine your own resources more critically and appreciate the appropriate steps to build resources for success.

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Pierre DeBois Pierre Debois is Associate Book Editor for Small Business Trends. He is the Founder of Zimana, a consultancy providing strategic analysis to small and medium sized businesses that rely on web analytics data. A Gary, Indiana native, Pierre is currently based in Brooklyn. He blogs about marketing, finance, social media, and analytics at Zimana blog.

2 Reactions
  1. Pierre.

    This is a well written article and review. We all as small business owners should take every measure necessary to ensure that we’re implementing the most appropriate processes within our business – this is key to long term success.

    I feel that within my market (the internet marketing niche) the most beneficial things that I do is focus on building long-term mutually beneficial relationships with influencers. This will be sure to secure my sustainability and longevity.

    Thanks for sharing this information with us. It was very insightful.