Some of the smartest entrepreneurs bootstrap their business before heading to Silicon Valley to raise funds. Lithium Technologies, which started in 2001, is such a company, having waited until 2007 to get its first infusion of venture financing. In total, the company has raised some $45 million. Its last valuation was $200 million. Watch Lyle Fong, founder and CEO, talk about why he waited until the timing was right, from a market-raising and market perspective. And, hear how Lithium originated from a consumer-facing gaming company to a social-media software company that allows corporations to engage their customers. As for big expensive mistakes, Lyle said he made more at his previous company when the money raised was spent foolishly, like the time his company threw a party at the Playboy Mansion.

As for the three pieces of advice to entrepreneurs:

Be flexible and allow your idea to evolve.

Be passionate about what you're doing or someone with more passion will likely succeed over you.

Constantly hire people smarter than you.