It is an error to mention Microsoft in the context of Venture Capital backed firms except as a point of comparison. Microsoft was not VC funded. That's one reason why its IPO made the world's richest person and created 10,000+ millionaires. It is also what allowed Gates and Ballmer to retain enough shares to act for the long term and ignore Wall Street's quarterly horizon for over 25 years.
Microsoft did take venture money, albeit when it was further along. Microsoft began its hypergrowth in 1981, after they contracted with IBM to provide the PC's operating system. It wasn't until then that they needed outside capital to support their growth.
Bill Gates' high-school classmate David Marquardt invested through Technology Venture Investors (TVI) and joined Microsoft's board of directors in 1981. (He just stepped down last year.) This was several years after the company was founded in 1975, but well before the 1986 IPO.
