Don't let it discourage you, because it's motivation to discover what they're trying to key in on. For us and our investors it was whether we'd mortgage our houses (hypothetically) to keep the business afloat and see the vision through.
As it turned out, we started in Feb of 2020, with much of our sales pipeline (over 2mil) disappearing in a day and a half when things shut down. So we didn't mortgage our houses but we buckled in, reduced expenses, found alternative revenue streams and survived.
We are here today and executing on our original vision after going through all that. I did end up selling my house to fund my family while we navigated everything, and it was not easy.
Now our investors treat us well because we did that. If you asked me ahead of time if we had the grit to do that I would think almost certainly no. When you're in the thick of it (And especially if you PG'd something), it changes perspective.
For me, it was really a life lesson of don't raise money or take a chance unless you really believe in it and there's a fuzzy path to victory. Sales fixes everything, even if you have to temporarily pivot.
What an awful criteria. Your investors aren’t mortgaging or selling their houses. They’re just giving you other people’s money. Unfortunately, in a bad economy investors will hold all the cards and will be able to pressure founders into questionable life decisions.
If you had a choice to invest in founders who had such clarity, commitment, and grit that “they’d mortgage their house” vs a choice to invest in founders who were “in it as long as things keep going well”, which would you pick?
One that had a savvy to stay focused on the bottom line and the gut to say no to investors making vastly asymmetrical demands of risk, reward and personal security.
I do however wish the GP all the luck in the world.
Does CALPERS or the Texas Teachers Pension Fund require an Austin based VCs to mortgage their house?
Hardly.
Founders who have been around a long time know the game. Founders are disposable soldiers , VCs are Lieutenants and GPs/Asset Owners are Generals.
It's that simple. And it's okay. The BS part is when Lieutenants feel the need to conceal the truth or make motivational posts such as the OP .
The absolute worst is when a soldier manages to be decorated in battle...all the Lieutenants become absolute fangirls and ask him for autographs and pictures whereas they treat other soldiers like crap. Of course such behavior is in the hope to impress the Generals.
As it turned out, we started in Feb of 2020, with much of our sales pipeline (over 2mil) disappearing in a day and a half when things shut down. So we didn't mortgage our houses but we buckled in, reduced expenses, found alternative revenue streams and survived.
We are here today and executing on our original vision after going through all that. I did end up selling my house to fund my family while we navigated everything, and it was not easy.
Now our investors treat us well because we did that. If you asked me ahead of time if we had the grit to do that I would think almost certainly no. When you're in the thick of it (And especially if you PG'd something), it changes perspective.
For me, it was really a life lesson of don't raise money or take a chance unless you really believe in it and there's a fuzzy path to victory. Sales fixes everything, even if you have to temporarily pivot.
You have it in you, I promise.