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When Fundraising Goes Wrong: 8 Common Mistakes

I gave a talk last week at the F50.io (Fundable 50) conference. It was well received, with nearly a dozen people lined up afterward to talk with me and ask questions.

The presentation is online at http://bit.ly/StartupReadyF50

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Founders will face “The Fear”

the ravenDeep into that darkness peering, long I stood there wondering, fearing,
Doubting, dreaming dreams no mortal ever dared to dream before


(Edgar Allen Poe, The Raven)

If you are starting a company, you will face Fear.  I really mean “The Fear” in the broadest, darkest and most threatening way,  like the way a small child can be afraid of thunder and cry all night in ways that nobody can calm them down until the Fear has passed.  Some people avoid this Fear, and tell themselves stories (lies usually) about why they are doing what they do and the risks they face.  The Fear is there – they just haven’t faced it in a way that allows them to direct the fear energy into their passion.

 I am now “really” starting a company.  I’ve been “playing with” the idea of starting a company for nearly 15 years.  I took the risk to work for without pay for a startup that failed.  It was my first real experience of The Fear.  In my case, it showed up as plugging away at something for months after realizing it could never work, and going into debt since I was not getting paid and the promised funding never materialized.

I got out of that company and jumped into another startup as employee #1.  Here at least there was hope:  the founders had a much better track record and a well validated market.  So The Fear did not bother me as much.  I survived and the company was successful.  While I made money, it was not enough to ensure retirement.

So now I’m facing The Fear again.   This time for real and in a much deeper way. It would be “my” company, where I would be one of the founders making the strategic calls.  What business are we in?  How do we make money?   How do we raise money?  These are usual questions of startups and can be easy to discuss with others.

The Fear has a different set of questions, ones that are more personal and intense.  Other people can’t help as much with these.  Many of these are the “deep doubts” that trigger The Fear.  The others are the very real survival fears and existential fears.  A startup founder has to recognize and come to grips with these personal fears.

A few of those doubts I struggle with are core to the basic Fears:  Should I really take this risk?  I’m not 30, so if the company fails, I may end up very poor, lose my house and starve in my old age.    Is this particular company the best contribution I can make to the world at this time?  Can I really trust my co-founders?   Do I believe in this idea enough that I could infect (sell) others to it?   Will it really make a difference in the world?  Am I really willing to risk my marriage over this?

Some of these questions can have risk analysis applied:  if the company fails, how much money would I lose and with what consequences?  What are the opportunities that I know of that I would have to give up?  However, in the end, any risk analysis is a tool of writing down “reasonable guesses” to make decisions and won’t directly address the emotional side of the problem.  The risk analysis done by the rational mind can help to calm The Fear – but won’t end it.

These are my questions – I need to overcome them to a point where I am satisfied my path forward is the one that both “feels good” and where my rational mind can defend the decision and present good reasons why I’ve made that decision.  Even then, The Fear will be present and will come up again.  The Fear is part of being a curious and risk-taking human and its job is keep me from doing silly things that have no meaning or will threaten my survival.  Starting a company always threatens your survival – so “The Fear” is a real emotional experience all founders have to face – and face again and again, until the company succeeds. 

In the end, I as a founder has to be able to pass the test proposed by Chris Granger in his blog posting:

In truth, I think there’s a relatively simple test to determine whether or not someone could be a founder; when you’re done talking to them, have they infected you? Is your head spinning with their idea? Regardless of how ridiculous what they just said seems, do you believe even just a little that they could actually do it? And are they out to make a company/name/product or are they on a mission? This last one is the most important, because tenacity is what will keep your startup alive and it’s hard to imagine walking through hell for something you don’t truly believe in. And you will walk through hell – it’s something we don’t talk enough about amidst all the glorifying of startups that we do.


In that post, he also talks about The Fear.

In discussing the doubts that lead to The Fear, his thinking is crucial:

 And this is the stark truth of startups: you [as founder] are the last and only line of defense against doubt. There’s no one else to give these questions to. They are yours to stew in. They are yours to try to answer, though they’re unanswerable. They are yours to overcome. And the Fear that they represent is what keeps you up at night, what will make you wonder if this is really the “right” thing to do. I’m not sure anyone can truly explain what that kind of doubt is like and if they did it would likely only hint at the reality. But believe me that when people say startups are hard, they are woefully understating the truth. Yet I’m still doing one, and the reason why is rooted in the answer to the question my cousin asked. I’m doing this because I believe that this is the greatest contribution I can make.

If you too decide to wade into the murk of your own startup, do something that matters to you and do it with purpose. Show some real tenacity – it’s the only way to survive.

 I’m facing The Fear, and moving forward anyway.  Scary – and necessary for my emotional survival.  It is part of ensuring “my life mattered” to people and the world.

Picture courtesy of  http://kbslenglisha.wikispaces.com/file/view/DL3.jpg/95286974/605×454/DL3.jpg

 More reading about consequences of The Fear and dealing with the failure: http://mystartuphas30daystolive.tumblr.com/


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