#17) You’re Not a Natural Born Fundraiser
(because you come into this world a decent human being by default)
Listen, instead of read, if you wish:
I do not subscribe to the notion that Entrepreneurs should be Born Fundraisers.
I started my first company in my mid 20s in NYC, and I remember vividly the feeling of asking people for money for the first time. Awful. As if I was shedding all of the careful grooming tips my father had so consistently tried to bequeath to me over the years. No more Southern Gentleman, no, I had turned into a Willy Loman esque pyramid scheme salesman instead. It felt like that. It felt gross, antithetical to my core DNA.
I was proud of my upbringing, of being a Gentleman, of living up to what my father taught me being a Gentleman was all about.
Pitching people to invest in something that would very likely go bust? No, sorry, pitching close friends, family and business connections to invest in something that would, statistically speaking, have an 80% change of wiping out in 2 years, no, that was not part of the code of being a Gentleman.
But I took a big breath and started to ring up people to meet, have drinks and then, yes, ask them to invest. I came close to giving up my dream of starting a dotcom software company simply because of the fundraising - it felt so very very wrong.
Living in Norway I think the locals assume I have some American gene that makes me more extroverted, energetic and animated - gifting me with an innate ability to sell.
Nope. I’m an only child. I started life as an introvert. Most comfortable in the bedroom with my nose buried in a Tolkien book. I could go hours on my own, happily, without need for stimuli or engagement. I was not a loner per se, but I was happy being in my own space.
I was comfortable with adults early on, yes. And I developed a number of friendships early on too - friends from kindergarten whom I treasure to this day. I pride myself on my circle of friends, but I hope they do not feel I’ve been nurturing them so I can hit them up for money for fuck’s sake.
I started as an academic, on my way to get a Ph.D in American Studies from the University of Virginia. I taught for a number of years at a boarding school just north of Charlotesville, Virginia - Woodberry Forest School. Some of the happiest, healthiest years of my life without question. Learned to play the guitar. Had no TV in my cottage. Coached tennis. Directed a few school plays. Took kids to see Sonic Youth in Richmond.
That was The Me before I became an Entrepreneur.
We bootstrapped our business into being, my cofounder and I. I remember pulling cash out of ATMs and handing him a wad of notes so he could get by for a few weeks. I remember jacking up three credit cards. I remember signing contracts, big contracts with media companies, but then not having the ability to make payroll at the end of the month - oh, that’s what you mean by “cashflow.”
And that, friends, is when I learned how to pick up the phone and outright beg. To pick up the phone and call a banker friend of mine to wire me $25k on the spot.
After walking around Union Square in a panic, that is, mumbling What do I do What do I do What do I do. And he did indeed bail me out. But Andrew, can you actually wire it this afternoon man? I am sure it was as deeply uncomfortable for him as it was for me. In hindsight I put him on the spot, I guilted him into doing it. I eventually paid him back - a long long while later.
What the hell was a business model?
I could recommend a good book or a new album. I could challenge you to a game of doubles tennis with confidence. I could throw back a martini. But model a business? Nope. And here I was, in business, with a few people already on my payroll.
This was not sexy. This was not glamorous. This, in hindsight, was enormous stress that would come to shape me for the rest of my life - both for good and for bad. In equal measures I would say.
So I had to to raise money. We had a good friend, a Darden grad, who built our model and coached us on all of this Business 101 stuff - for 2% equity in the company as his fee. He taught us the phrase “recurring revenue” which I had never heard before. He did a good, dedicated job, working on Sundays with us in our bare bones hipster loft office just off Union Square, above a pizza shop. He implored us to find a product as opposed to relying so heavily on professional services. This was solid, impeachable business advice which in hindsight, funnily enough, might have been wrong for us. Back in those days, major creative and “web agencies” were gobbling up boutiques left and right, rolling them right up. We may well have exited for more money into a better culture earlier on if we had stuck to our DNA at that point. We ended up exiting, yes, to a Nasdaq traded company, and we did fine, in the end, but still.
We raised money from friends and family. I think about $500k. We brought on high net worth individuals from London for seven figures. We brought on Electronic Arts for seven figures (investment plus a major development contract) after an epic life changing pitch to a bunch of arrogant people in a shiny office off Route 101 in California. It was their second announcement of an “internet investment” back in those days, quite a big deal.
There was a whole host of advisors, mentors, lawyers, giving us advice back then. It was a whirlwind. Who to trust? Who to really listen to? When to go against them and trust in your own instincts? Collated, it was all super helpful along the way, even the “bad” advice. I am grateful to them all.
But it was also like a series of one hour interventions from a variety of psychologists with different backgrounds and practices. Having one head coach throughout the match would have been less dizzying and likely more of an impactful learning experience.
Total aside: one particular piece of advice stuck with me bigtime, from a pioneering CEO of ESPN, Bill Grimes, who invested in us, mentored us. He taught us the “walkaway close” when negotiating with the NHL. This had nothing to do with fundraising per se, btw, but it’s a moment that sprang to mind when writing this and I had to share. We desperately wanted / needed this contract to build online games for the NHL, but they were being typical dicks as a big media company (and few groups are more outright arrogant “we hold all the cards” than sports bodies, fair warning people). So he told us to just walk away. Say nope, sorry, these are our terms, and leave the next meeting without resolution. Man oh man was that difficult. But I did it. And I remember calling the cofounder in the taxi heading back downtown, saying Oh My God, what have we done. But a few days later they indeed called (people still rang each other back in those days), made what was a minor deal capitulation really, and we signed. A major confidence booster nonetheless.
Back to the main plot line:
You are not born a fundraiser, sorry. Just not true. It’s a myth. I get quite pissed off when I see post after post telling entrepreneurs to “do it yourself.”
I would not go rock climbing without careful training and advice from experts. I would not fire a gun on the range without expert advice (because I might injure myself and others). I use those examples because the risk / reward levels are similar.
I would not go build a new terrace without finding somebody who had done it before (and then likely end up paying her to do it as I would be terrible at it even with expert advice). If you were to learn to be a chef, best to pick a badass chef and go deep into the kitchen with her for a few years - and then strike out on your own. Do it your way now, apprentice, ingest the advice you admire and reject the methods you disparage.
You get the point. I could list 1000 more examples of when asking for experienced advice whilst starting out on a new journey is the wise move as opposed to learning as you go.
If you are a first time entrepreneur and find the whole fundraising process awful and bewildering and gross - good! That’s a healthy sign that you’re a decent human being. You’re the sort of person I would prefer to invest in. Coachable? Somebody eager to learn? Sign me up.
“Born hustlers”? Well, not getting my money at any rate. I don’t want to be hustled. I don’t want to be charmed out of $50k. Been there, done that. Not a rewarding experience on any level.
I want to be groomed and nurtured as a potential investor.
Find an expert the first time out of the gate Entrepreneurs! Find somebody who has a track record of early stage financing - not just successes by the way, but also major failures too. Somebody who will actively coach you and do knowledge transfer so that you can then do it yourself come the next fundraise. Because there will definitely be another fundraise. And another.
Peter Drucker tells us that the idea of the Born Entrepreneur is a myth. It is a discipline. And like any discipline, it can be learned. It can be taught.
And being an Entrepreneur, sorry to tell you, is being a Fundraiser.
Delightful reading and good advice. Thank you