F*ck the Other Side of the Table
Of late, I’ve been asked by people to shed some light about the Angel, Venture Capital, and Private Equity industries. People are absolutely fascinated and intrigued about early-stage financing. It’s sexy, right? To be able to invest thousands or millions of dollars into innovative ideas and turn them into millions or billions more is something not everyone gets to do everyday. But the rate at which I hear young, talented people wanting to be on “that side of the table” is alarming.
Let me digress for a moment. Every business needs cash to survive. Lack of cash is one of the sole reasons why businesses don’t. And of course, cash is one of the hardest things for an early stage company to get. So, when a company secures funding, people go crazy. The media publicizes every single time a company raises any amount of money, to the point where young entrepreneurs aspire only to get financing. New entrepreneurs look at those around them as being successful only when they’ve raised big-time money. I won’t lie, I’ve thought the same about some of my close friends who’ve raised money and envied their prowess in navigating and securing private financing. Let’s face it, in some ways, getting money is a form of validation in that someone (other than your mom) thinks your business shows promise, and that feels good as a startup founder.
But this fanaticism has got to stop. I’ve seen too many young, smart and talented people interested in entrepreneurs and the startup community, but none actually want to create something. They want to be involved in all the sexiness of multi-million dollar deals without doing any of the heavy lifting. They want to sit across the table from the entrepreneur and tell them no when they need money. And some have even told me that they want to start a company that helps other entrepreneurs build their company. Are you kidding me?! You want to help others build their dreams?? Bullshit. It’s no wonder why; all you need to do is look around at all of the startup incubators popping up and the voracity at which they churn companies out like well oiled machines. They make it look easy, like any idiot could do it. But the principals at these incubators were once operators, and that’s why they’re good at what they do. For a young entrepreneur who has never built and/or sold a company, how on earth do you think you can provide others with knowledge to do the same?
So, some advice for all those first-time entrepreneurs interested in startups: F the other side of the table. If you’re interested in the “sexy” side of early-stage financing, go start a company or join one that needs your talents. Don’t go sit across from them with the money and say no. Why? Well, here’s the best 4 step process to explain it all:
- Start and build a solid, stable, platform company.
- Grow it into something wildly successful.
- Instead of selling it off to go work for/start an early stage venture fund, use the COMPANY to make investments and do acquisitions.
- Love life.
That’s how Jeff Bezos’ been doing it, and I bet he’s having the time of his life.