What if losing all an investor’s money isn’t as bad as most entrepreneurs think?
One of the worst parts about raising venture capital for your startup is that it nearly guarantees an incredibly awkward conversation at some unknown point in the future. That conversation is going to be with an investor after you’ve lost lots of that person’s money.
I realize most entrepreneurs aren’t thinking about this pending conversation while they’re busy fundraising. After all, they’re too busy worrying about how to actually get investors. However, since the majority of startups ultimately fail — including venture-backed startups — even the entrepreneurs who successfully raise capital are more than likely going to find themselves face-to-face with someone whose money they ultimately lost.
I had the awkward pleasure of being in precisely that situation a couple years after my first venture-backed company failed. I was at a conference when I bumped into a former investor whose rather large pile of money I ultimately squandered. Admittedly, it had been a little while, but, as soon as I saw him, all the feelings of failure and inadequacy rushed over me like I’d only just told him I was shutting down my company last week.
To his credit, he didn’t make our meeting awkward. In fact, he was very nice, asked about my health, my family, etcetera, and he even mentioned how much he enjoyed reading my articles about startups and entrepreneurship. “You paid for most of the lessons,” I wanted to tell him, but I decided that joke wasn’t appropriate. Instead, I said something much worse.
“I’d love to catch up sometime and grab a coffee,” I blurted out as the conversation was nearing its natural end. I don’t know why I said it. I would have rathered a root canal than to awkwardly spend anymore time chatting with this man I’d so egregiously failed. Maybe he felt the same way, but, rather than admit it, he agreed, and we scheduled a time to meet for coffee during a break in the conference the following afternoon.
The next day, I walked into the coffee house across from the conference center a few minutes early, and I was…