Coming up with an idea is one thing, but making the decision to take that idea and attempt to execute on it takes guts.
Even more than that, coming up with an idea, spending several weeks working on it, and then approaching a Venture Capitalist, is even harder.
Here we were, with no experience in creating a startup, pitching our idea to a VC firm, hoping to get some seed funding so we can build this mega-business.
We got to the end of our pitch and they asked some questions. Man we felt confident in what we were saying, and the idea we had in place. Our answers, our research, our concept, it was all crystal clear…and then we heard: “No one’s going to invest any money right now, you’re going to have to bootstrap it.”
What? No, surely that’s not the case! Suddenly, I felt like Ralphie from “A Christmas Story”. They pretty much just told us they wouldn’t give us money, because “we’d shoot our eye out.”
But that wasn’t the worst part.
At the end of the conversation, one of the guys told us: “You’re going to have to learn how to make sacrifices. We just had a CEO step down so that he could start a business. That’s the kind of sacrifice we’re looking for, and that we invest in.”
Quickly, I rebutted, “Are you [bleep]ing kidding me?”.
Okay, I didn’t say that (as much as I wanted to), but my blood was boiling at this point. I was thinking this HAD to be a joke. Any minute now a camera crew was going to bust in the room and tell us we were on some TV show. Then I realized, he was serious. Here we were listening to an excerpt about a 50 year old, with probably $500,000+ in savings and retirement, that decides to no longer work his $200k a year job. He comes for an investment, part of which is going towards his salary, and to these investors, THAT was a sacrifice?
I’m not one to burn bridges, because you never know how that will come full circle in the future, however, after the meeting I walked out of there really wishing I would have spoken up.
We were working 16-18 hour days, sometimes pulling all nighters. We were running on redbull, coffee, and pure entrepreneurial adrenaline. We were making $0, and had no retirement. I had just gotten married two months earlier, and one of us just had a newborn. We were trying to figure out how to start a business, while all of our other friends were out getting jobs. We had thrown caution to the wind and stopped working on our day jobs completely, because we were so confident in this idea. We were trying to talk with business owners during the day, and planning during the night. We didn’t know where our next meal was coming from, and we accepted that. To me, THAT is a sacrifice. THAT is the kind of passion you want to invest in.
Now, these guys aren’t dumb by any means. Our concept wasn’t 100% crystal clear, heck we were barely a few weeks into it. We hadn’t proven anything, nor did we deserve anything. However, I feel pretty confident that had I spoken up in that meeting, and laid out the sacrifices we had made in just a short amount of time, and that we were willing to continue to make, they would have seen how deep our passion ran. But today, I’m glad I didn’t say a word. For most startups, you’ll think an investor is a godsend, but, in the early stages especially, you’ll want to find an investor that has the same beliefs and ideology as you. You’ll want to make sure you’re the right fit for each other.
Don’t think you need an investor to get your company off the ground.
Being told to bootstrap was the best advice we ever got. It forced us to think clearer, and more strategically. We had to choose what the minimum viable product of our idea looked like, and we had to prove the concept. We had to tweak, refine, and alter our model, but we did it in real time. We didn’t invest tons of money and then go to market. We did little iterations, staying nimble as we moved forward. We spent every dollar as if it were our last. Looking back I wouldn’t change the decision we made to bootstrap. Our vision, our culture, and our mission, has all become much clearer. Our respect for capital and how we apply it has evolved dramatically. The process has been slightly slower, because you have to “figure things out” rather then just having the funds to back you, but in the long run, you will be much more sustainable.