The Formula Startups Use to Make Billions (Infographic) Startup organization Funders and Founders pulled back the veil on the startup lifecycle in this infographic, which was inspired by legendary investor Paul Graham's famous essay, 'How to Start a Startup.'

By Catherine Clifford • Apr 11, 2014

Opinions expressed by Entrepreneur contributors are their own.

From thousands of miles away, Silicon Valley can feel like a magic box: normal people enter and out pop billionaires. But the startup ecosystem is much like the Wizard of Oz, where, when you pull back the green curtain, there stands a man.

There's actually a fairly systematic process behind the formation, growth and financial success of many startups. Which is not to say that it is a fool's errand to launch a successful startup and grow it into a billion-dollar company, but only to say that it has been done, and there is a worn path and a mature ecosystem surrounding this routine.

San Francisco-based startup organization Funders and Founders generated the infographic below, breaking down the way an entrepreneur goes from idea generation through to initial public offering. The infographic is based loosely based on famous programmer and venture capitalist Paul Graham's essay "How to Start a Startup."

Take a look to get a clearer picture of what goes on in the big black box that is Silicon Valley. Behind the green curtain.

Click to Enlarge+

The Formula Startups Use to Make Billions (Infographic)

Catherine Clifford

Senior Entrepreneurship Writer at CNBC

Catherine Clifford is senior entrepreneurship writer at CNBC. She was formerly a senior writer at Entrepreneur.com, the small business reporter at CNNMoney and an assistant in the New York bureau for CNN. Clifford attended Columbia University where she earned a bachelor's degree. She lives in Brooklyn, N.Y. You can follow her on Twitter at @CatClifford.