By Corrine Sandler, and EO Toronto member, founder of Fresh Intelligence and CEO of ValidateIT.com
When I started my first business seven years ago, I knew I had a concept that I had to act on quickly. The only thing holding me back? I didn’t know how to finance a startup. I had no idea how to borrow money or where to look for investors, so my only option was bootstrapping.
I approached a friend who ran a marketing company, and he offered me office space and a little cash. It wasn’t much, but it was a start. I often say that I built my company with the bricks others have thrown at me. Three months later, I paid back my minimal cash loan, and seven years later, my company, Fresh Intelligence, is a thriving global enterprise with offices in two major cities. I am the sole principal with a kick-ass senior executive team and employees that I’ve been told would walk on hot coals for me.
As a serial entrepreneur, one company is never enough, so I started my next venture almost six months ago— but this time I chose a different approach to finance it. It’s a technology company, and I needed to scale it quickly to grab first-mover advantage without first-mover risk. I had built the technology. I had set up the entity. Now I needed to go hunting for the capital to make it happen.
Thus began my bad romance: courting cash; building a pitch deck, refining the pitch deck, building a new pitch deck; honing my mission and vision; crafting new pro formas and financials; changing my acquisition strategy; moving my target; building a new pitch deck; and chasing the cash cows all over the country. I spent six months meeting with venture capitalists (VC) in North America, and in the process completely lost touch with why I had wanted to start the business in the first place.
It started to feel like a lopsided tennis game with me doggedly lobbing back the volleys they sent flying over the net. It was a crash course in a business I knew nothing about, and I literally learned on the run. The VC’s demands shifted constantly, and I gladly obliged. They told me I needed a chief technology officer immediately, even though I had an MVP (minimum viable product) ready to go. But my job now was to appease them, so I shifted gears and began interviewing for a big-ticket employee.
And finally the penny dropped: I got a call from a VC that focused on seed-stage funding. They were close to getting me a term sheet— we just needed to meet for a final discussion. They could squeeze me in for an hour at a Starbucks across the street from their 3 p.m. meeting … could I be there? Oh, yes. Yes, I could. Two hours out from the scheduled meeting, I got an email. We had a new time and a new location. My hour was now down to 45 minutes.
As I read the email, I paused for a moment to reflect. In my first company—the initial bootstrapped baby—I had always had the autonomy to make my own decisions and drive my own vision and mission. Suddenly, I was reduced to being a glorified go-fer … and where would that end? In that moment, I thought of something a friend had said: “Corrine, they’re all your friends until they give you money, and then it’s the bottom line that counts. Period.”
I looked at the calendar. Had it really been six months since I launched my technology platform? What had become of my vision? My mission? I hadn’t laid a single brick. I had been waiting for others to do it for me, and I’d nearly lost my way. I agreed to the VC’s change of location. I went there to thank them for their time, and inform them that I had decided to focus on my company—emphasis on “my”—and not their funds. The experience I had gained was invaluable, but the time I had spent could have cost me my first-mover advantage … and my autonomy.
Looking back, this experience taught me to never lose sight of your mission or vision when weighing your growth options. And don’t let dollar signs steal your dreams, distort your business plan or dilute your vision. Would I do it again? Never say never— but not on anyone’s terms but mine. Let the VCs come knocking. Until then, I’ll carry my own bricks and build my own home.
Lessons Learning from My VC Love Affair
- If they ask you to change your business plan to get dollars, walk away.
- If they focus on year-one revenue and not the concept, run away.
- If they think they have the power because you need them, hide away. They must want you more.
- If you find yourself celebrating a term sheet arrival more than a sale, you’ve lost your way.
If your original vision is disappearing in the rearview, and you don’t like the looks of the landscape ahead, grab the wheel. It’s your way or the highway.
Corrine Sandler (pictured) is an EO Toronto member; the founder and chief strategic officer of Fresh Intelligence, a custom research firm; and CEO of ValidateIT Technologies, Inc., a technology insight platform. She is also an Advantage best-selling author of Wake Up or Die. Contact Corrine at [email protected]
Categories: Entrepreneurial Journey Lessons Learned members WOMEN ENTREPRENEURS