The founder’s reprieve between funding rounds never feels long enough. Way too often, you find yourself in a room asking your investors to pull out their checkbooks again. Recently, one of my investors tried to cheer me up: “Listen Matt, you aren’t a real entrepreneur if you haven’t run out of money a few times.”
I wish the mood was always so jovial. But I was not having a good week. This round of funding was going to be different, because this time I had no more money of my own to put into the company. That makes a big difference to certain investors. I didn’t know if my angels would be willing to put up more cash, and I had no where else to go.
The bank owned my home (I had already mortgaged it twice), my credit card debt was building up (again), and the company’s commercial bank balance dwindled dangerously close to zero. I had no idea how I was going to cover the month’s payroll and people won’t work long for companies that can’t pay them. I had put everything I owned into this ship and it was in danger of sinking.
So what did I do? I went salsa dancing.
It just so happened that this same week a close friend had asked me to go out to a local salsa club with him. It was important: He was supposed to meet a woman there, and he needed his wingman. In the past I would have shut down my social life to focus on the company crisis, operating in panic mode for days on end until I came up with a solution. This time was different: I had been in and out of the fire enough to know that I could go out for the night to try to relax for a few hours and the sky wouldn’t fall.
As we walked to the club, I outlined the current state of affairs at my company, and explained how dire the scenario had become. Throughout the night, he asked me repeatedly, “Seriously, Matt. What are you going to do?” Here was a guy with a stable 401k plan, who shreds his mail and takes long, careful periods of planning before making any major life decisions. When it comes to risk taking we are polar opposites. He looked at me in the way that one might look at a man whose fate is sealed. You could see it in his concerned—and confused—eyes: “I’m looking at a dead man. A dead man who has gone out dancing.”
I actually found myself consoling him that I would be okay. I told him the truth: I was scared shitless and really couldn’t see through to the other side of this one, but I knew I’d pull through. I knew this because I had done it before and there simple wasn’t any other option: I wasn’t going to die or starve to death, so there could be worse problems to face. I raised my drink to my friend.
“I will tell you this: If you want to be an entrepreneur, you better learn to be able to sleep in the fire. I’ll take that along with the danger of failure over going each day to a job with no reward any day, no matter how safe that job might be.”
I’m not advocating recklessness here, or attempting to romanticize the dangers of risk-taking; businesses are not built on irresponsible behavior. That is often how they are lost. Sure, I decided to go out dancing, but this doesn’t mean my problems weren’t in the back of my mind all night, because they certainly were. My business and my home were at risk – but large problems like these follow an entrepreneur everywhere they go.
What every founder needs to grasp is that there is a line between attentive concern and freaking out. There is a balance between letting a danger move you to aggressive problem solving, while not letting the stress break you down. I went home after an enjoyable night at the club, picked up my pen and put in some serious time cranking out as many creative solutions as I could muster. Then I turned off the light, crawled into bed, and fell asleep. I woke up the next day rested and ready to drive forward.
I survived. My investors didn’t give in to my funding pleas right away. They sent me away a few times and held my feet to the fire as the clock wound down. I remained calm, listened to their requests, and managed to work with them without “going Chernobyl” in the boardroom. Through remaining calm I came out the other side with signed checks and my company in tact.
The lesson here is that an entrepreneur has to learn to be able to live with fear and uncertainty – learn how to sleep in the midst of a fire. If we can’t handle the stress of high pressure situations with calm, our companies don’t have a chance.
Oh, I almost forgot: the girl my friend was supposed to meet that night eventually did show up… with her husband. Had I stayed home wringing my hands over my funding crisis, I would have missed the chance to razz him about it these last six months. (A nice reprieve if ever I had one!) So remember this: Some things in life are worth taking a break for.