Should I Feel Guilty for Not Trying to Raise Funding?
Originally published on Medium.com
This week I attended an event where several technology entrepreneurs, lawyers and investors were gathering for the purpose of networking and apparent competition of my ego is bigger than your ego measuring.
I was an invited guest of a good friend and though I typically avoid these kinds of events like the plague, decided to attend.
It didn’t take long to realize why I normally don’t attend these kinds of functions.
Here comes that stupid networking question!
“So what do you do Steve?”
If you know me, you know that this form of networking drives me absolutely bonkers.
And for me, it’s a loaded question. Why? Because the real answer I’d love to give is I do a lot. I am an author, speaker, trainer and coach but then I have this other crazy identity where I am also a technology entrepreneur — owning three different software ventures.
Given the environment, most conversations gravitated towards tell me more about the software. It was kind of funny how easily these conversations turned from casual, polite chit-chat to serious, deliberate interrogation of my venture. The questions all revolved around our relative to size, market opportunity, how much funding we’ve raised and my exit strategy.
Dude…do you need blood and urine while we’re at it?
It seems my approach to running and growing my ventures seemed to take a dramatic, judgemental turn.
“Why wouldn’t you try for a raise?”
“Seriously, you are bootstrapping?
“Oh my God, how can you make any money that way?”
“Don’t you want to grow?”
I maybe had 8–10 conversations that night with entrepreneurs and investors alike and they all seemingly went down the same rabbit hole.
I couldn’t help but feel judged and not in a good way. More like I had spinach in my teeth kind of way.
Judgment like your 47 years old and running these companies like you don’t really want them to succeed. No one said it quite like that but that’s exactly how it felt. Okay, actually one asshole did say it exactly like that.
One investor pulled a 30ish looking entrepreneur into our conversation at one point and presented what he had just learned about me and my company. He caught this guy up with my backstory like it was some sort of science experiment on display you couldn’t take your eyes off of.
“Wait, you haven’t gone for a series A? In that space? What are you thinking?” They laughed together, patted me on my back like I was some poor unsophisticated dope. Which honestly, I was beginning to feel like.
The entrepreneur said without missing a beat, “I’ve built three companies and I wouldn’t get out of bed if I didn’t have sizeable capital to back of them. I mean how the hell do you do that and expect to be successful?” Then he said something I’ve said for years to my coaching clients that I’ve helped through a career change. “There’s no nobility in poverty.”
Ouch, that hurt. But to be clear, we’re not poor but we’re not yet knocking down fat stacks of cash either. All of our profits are being reinvested, we’re growing, providing jobs and building something I’m extremely proud of.
I was proud of what we’ve accomplished but it would be easy to walk away from these conversations thinking maybe I shouldn’t be.
Am I Screwing Up?
Listen, I am a pretty self-confident guy and don’t tend to compare myself to others but on this night that was all out the window. I talked with what seemed like an endless sea of entrepreneurs all building really cool shit and really awesome teams because funding had allowed them to. Sure, it’s easy to get dissuaded with my “slow and steady” eventually win the race when you are surrounded by business leaders that have skipped that bullshit and were punching the button to the hyperdrive like they were Han Solo.
It bothered me. I’m not too proud to say it.
Maybe my little band of pirates building cool shit themselves deserved better. Maybe they would be moving towards the outer reaches of the solar system at lightspeed if I had only agreed to take a few more of the calls from investors who came calling when our software company’s profile had risen ever so slightly.
Perhaps I should have paid better attention to these monster investments for ideas that were way stupider than what we are working on.
Maybe I should have thought about how volatile the competitive landscape is and how investment could have helped me pack a George Foreman punch to the market.
Perhaps I could have not been such an anal-retentive bozo that could have been more comfortable not owning if not all, most of the pie.
Hell, perhaps I could have allowed myself to imagine a pie that could take of the width of my visionary table instead of the solitary corner it occupies today.
Maybe I am screwing up. Maybe I am missing one hellacious opportunity to fund these ventures and really see what we can do when we have the hustle to buy the muscle.
Perhaps…
But Wait, Does Funding Guarantee Success?
I did some research and ran across a few technology and software plays that raised a crazy amount of funding. All incredible ideals, fantastic technological breakthroughs, strong leadership and teams and yet, they failed.
Here are two articles that might be of interest:
12 startups that failed this year and took $1.4 billion in VC funding with them
RIP: 10 Well-Funded Startups That Died in 2017
Out of the ventures that receive angel or venture funding, there is still a high failure rate according to Harvard Business School Professor Shikar Gosh. High meaning like 75% high.
But as professor Gosh states, VCs don’t like to talk about their failures, only the wins.
According to a close friend of mine that invests in early-stage startups, she is playing the lottery hoping 1 out of 10 investments pays off in the long run.
10% success rate and that would be considered good? When I seemed surprised by that, she told me, “I invest in ideas and it’s usually the people that screw things up. They mismanage the money, invest in expensive office spaces, showy marketing stuff and forget to hustle and continue to innovate.
That’s where you are different. You are in the trenches every day and there’s no doubt if I invested in you, you’d be one of my wins, but you never asked for money!”
By the way — I am intentionally withholding the name of my friend because she’s actively engaged in the investor community in Austin and wouldn’t want 9 of her investments to read this and automatically assume that she expects them to fail.
The point here is, investment does not guarantee success. From what I can tell from the articles above, in most cases it may just further delay the eventual failure.
To me, risking someone else’s money is not something I’m comfortable doing at this point. But is that smart?
Following that evening where so many people had such a visceral reaction, it would be easy to wonder.
Careful Steve, Don’t Fall into The Trap
It’s easy after having so many conversations that all seemed to go the same way, to feel like a big fat failure. A few years ago, an experience like the one I had would have devastated me. It would have definitely put me into a multi-month depression as I replayed the “you’re a loser” self-talk over and over in my own head.
I won’t allow myself to go down that road again as I did as a young entrepreneur.
I don’t like owing other people anything. It makes me nervous and gnaws on me constantly. It puts me in a position of distress which permeates how I make decisions, develop strategy and plan for the future.
When I think about taking investment, angel or otherwise, it gives me pangs of anxiety. Would capital help our ventures grow? Absolutely. Would we be able to double down and add more development staff, increase our business development effort, and upgrade to nicer digs than the small space we have now? You know the answer already.
But I would just say — at what cost?
Investment to me would feel like I am working a job and not building my future. I would no longer be in “total” control and that would bug the crap out of me.
It would be nice to have some bigger cushion in the bank to take some bigger swings at the ball I’m not going to lie. No doubt our home run and on-base percentage would increase and growth would likely accelerate.
But it wouldn’t be as much fun.
You see at the end of the day I am a bootstrapper. I love the fight, I yearn for the battle, and I excel at walking the tightrope without a safety net. Maybe that makes me irresponsible and uncultured amongst venture-backed entrepreneurs.
I no longer care what people think of me or what I am doing because it’s not their life, it’s not their company. Opinions are like assholes, everyone has one. I’ve also learned the bigger the asshole, the bigger the opinion. I have also come to realize that the only opinion that matters is my own. Maybe that comes with age and experience, I don’t know.
One thing I do know, is I am more committed than ever to prove those doubters wrong…yet again.