186. This Will Not Be Your Last Startup

VC Minute
"This will not be your last startup."

VC Minute – quick advice to help startup founders fundraise better

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Eric Marcoullier:

Rich. I’ve had the benefit of having your presence at my CEO dinners a couple of times now, and I really appreciate that.

And, you know, that mental health. Especially in this market, this is the one concept that we keep coming back to, quarter after quarter. Last month, I read this very beat poetry sort of thing to inspire people to reflect on why they were still running their startup. And so it went something like this.

Stress makes the world shrink. When I get on stage to talk, it still freaks me the hell out. And this is talking to a group of people that I adore.

The world shrinks much, much further when your company is at risk. And I want to challenge that success or not, this will not be your last startup. Startups are like tattoos. There are a lot of people without tattoos. There are a lot of people with lots of tattoos. There are very few people who have one tattoo.

This will not be your last startup.

If you raise capital, you do not have a moral obligation to return your investors’ money. So many people think that these investors were gracious enough to give me a million dollars—2 million, 50—doesn’t matter. And you want to honor that and give them their money back at the very least. VCs are not in the business of getting their money back. They’re in the business of investing in 50X companies. And one looks a hell of a lot closer to zero than it does to 50.

Losing investor money will not make it harder to raise capital, and it might even make it easier. You’ve learned something. You’ve probably learned many somethings and many more things than the first-time entrepreneur who got lucky.

This will not be your last startup.

If you knew what you know now about your business, would you start the company from scratch at this moment in your life? If the answer is no, why are you still working on it?

This will not be your last startup.

And I’m beginning to feel like that’s a threat. So many CEOs gridded out because they were terrified of some nameless, formless outcome on the other side of winding down their startup. If you ask them what they’re afraid of, they can’t tell you. But it keeps them grinding it out.

Spend some time thinking about what throwing in the towel looks like. You’ll probably find it’s not so scary. It might even be appealing. I guarantee you that if you are scrimping by trying to turn the startup into a success, you’re not making much money. And I would almost guarantee that you will make more than that in the open market working for somebody else. So shutting down the startup that’s not working right now isn’t going to send you into poverty.

Entrepreneurship is a mental illness. We start companies despite all the risks and the obvious downsides. We have no rational decision-making. You will absolutely start another company like it or not.

My reason for hammering these points home is not because I want you to shut down your startup. I don’t know your business. You’re just listening to a podcast right now. I don’t want you to strangle your startup. I don’t want to kill your company. I want you to recognize that you are not trapped. You are choosing to build this company, and you can choose not to build this company. Odds are, you probably haven’t thought of those terms before.

And if you do, I guarantee you will feel less stressed out and be more excited about your company if that’s what you choose to continue doing. When plan A is to shut the company down, every other plan seems less drastic.

And remember, this isn’t the last fucking company for you. And that’s a promise.

Rich Maloy:

That is absolutely my favorite VC Minute guest episode. When Eric read that live at his Thunderview CEO Dinner, I begged him to come on the VC minute and share that with you all because I thought it was phenomenal. One of the things that I think is so powerful is reminding yourself that you have a choice.

If Eric’s advice resonates with you, head over to ObviousStartupAdvice.com and subscribe to Eric’s newsletter. If you’re in Colorado, you have to attend his CEO dinners, they’re phenomenal. And I also want to thank AVL growth partners for supporting another week of VC Minute. AVL’s team brings significant years of finance and accounting expertise. They ensure your path to success is crystal clear.

AVL starts with a comprehensive business evaluation, uncovering opportunities and mapping actions to both your short- and long-term goals. Their evaluations are crafted from over a decade of experience pivoting companies from growth to scale. If you want to take your company to the next level and need the experience required to make it happen, visit AVLgrowth.com right now.

About Eric Marcoullier
Eric coaches first- and second-time tech CEOs, keeping their companies alive long enough to get lucky, figure out their business, find product/market fit and replace his ass with someone who knows how to scale companies beyond $5M in ARR. His work primarily involves challenging business assumptions, providing frameworks for new situations and distilling complexity down to basic, actionable ideas. If you’d like to learn more about his coaching, visit www.marcoullier.com or www.linkedin.com/in/bpm140

About AVL Growth Partners
AVL Growth Partners, founded in 2009, is the leading fractional Finance and Accounting firm supporting organizations in pivoting from growth to scale. AVL brings an experienced team of CFOs, Controllers, and Accountants to your organization, delivering transparent, strategic actions for short and long-term success. Transform your financial approach affordably with AVL, supporting companies coast to coast – get to know AVL Growth Partners at avlgrowth.com. (Sponsored)

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