I didn’t grow up in an environment where people thought about business or entrepreneurship. It wasn’t until I was at Tulane that I realized that many business leadershave a “path” already set for them.
All of a sudden, when I was a senior, my friends (some of whom were either complete crackheads or generally weren’t the sharpest tools, to put mildly) had jobs at the largest bulge investment banks or even private equity. How was that possible?
I developed a bit of a chip on my shoulder about this, so, through the years, I had to overcome that–plus, a lot of ego and underlying insecurities that I didn’t really know what I was doing (I still don’t, but at least the ego is gone. A little). Seriously though, once I learned to let it go, out went my fear of failure and I learned what makes a founder truly successful.
Don’t Take Yourself so Seriously
Attitude is everything. You raised a series C? Sold a business once or twice? Congrats, but no one cares. This happens every day. Don’t be a jerk and think you’re the only one at the top of your game.
You can always tell who is the most successful person in the room as they are typically the most humble (and the worst dressed). On the flip side, know that you’re not the only one frustrated by fundraising, dealing with annoying investors, or stressed about the business.
We all have these challenges; share and learn from others; don’t complain and think you’re better than it. Have fun with this crazy venture world we live in.
Be Someone People Want to Work With
The team and a sizable total addressable market (“TAM”) are the two most critical boxes an investor is checking. They care about TAM because if you have a great team, but a small market size, these all-stars will just be fighting uphill in a small box.
If it’s a huge market, even a knucklehead like me can start a $1b business. When investors look at the team, they’re primarily thinking, “Is this person going to be outside smoking $100 bills of my money?” and “Who is this person?” and “Can they execute?”
Deals are made all the time based on the simple fact of whether or not someone likes you and if they think you give off a perception that you can actually get things done. That there’s a team in front of them who can execute. Pro tip: If you’re building a software company, it’s a pretty good idea to have people involved who can actually build the software (#JustSayin).
Remember, It’s Not about You…
It’s about the team, what you are all trying to accomplish, and the shareholders you are returning value for. As I’ve said, every founder can be fired at any moment, so try to separate yourself from the emotions of being a founder (yes, I know it’s your baby–but now, it’s also 20 other people’s stepchild).
If everyone disagrees with you on a decision, don’t go on a tirade that you’re the founder and you know best and overrule everyone else. Figure out why they have a different opinion. What are they seeing that you’re not?
The best founders know their blind spots and hire people to fill them who have different perspectives and backgrounds. If it’s your first business and you’ve never made people money, add advisors to your deck that people know who will provide the execution support. For instance, if you’re starting a cloud based point of sale company focused on retail, get the President of Coach to join your advisory board at the seed stage.
Don’t Get Defensive
Don’t be crazy or defensive when you meet with investors. Have zero ego. “Wow, that’s such a great question, thank you for asking” is a response to the stupidest question you’ve ever heard from a person who hasn’t been paying attention to your pitch.
Always be delightful and positive. It’s about getting a term sheet and getting the company funded–it’s not about you.
Remember, sometimes, you get asked stupid questions as a test–keep your cool and respond in the best way that you can. Reputation matters and you want to be known as a person people should be giving money to.
Build Real Relationships
I don’t go to tech conferences or meetups because I’m trying to find someone to invest in my new idea. Or to discover the next gotta-hire developer. I go because I’m actually interested in technology, innovation, entrepreneurship and I love to meet new people and hear about what they’re working on.
Here’s what makes me tick: sharing advice, learning from each other, and building quality friendships. It’s not the Hunger Games out there (though plenty of fools think it is). Be real and have a conversation because you’re interested in the conversation–not because where the conversation could lead.