Two Entrepreneurial Challenges Shaping Major Startup Decisions
Last week, I participated in a special webinar titled “The challenges of starting entrepreneurs” as part of the WizeTime event series by GeekTime and Wize. Kimberly Drori, Partner at ERB Financial Group, moderated a discussion I had with the founder and CEO of Spot.io, Amiram Shachar. Amiram’s company was acquired by NetApp last year and became a division within the company, which he now leads.
Amiram and I were initially asked to discuss the challenges of entrepreneurs from a founder vs. VC standpoint but quickly realized that we both view things from a human perspective, regardless of the roles we play.
At the very beginning of the webinar, I shared my view of three main challenge categories:
- Personal. It is the difficulty of facing yourself, your expectations, your imposter syndrome. The loneliness that many entrepreneurs experience and the deep need for support and understanding from their close friends and family.
- Managerial. It involves hiring great people and leading them, attracting talent before building the brand and funding to back up your promise, and growing with your team, not against it.
- Strategic. Entrepreneurs must know which elements to focus on, when to shift priorities, balance short- and long-term decisions, and march forward at just the right pace.
Kimberly and the audience asked Amiram and me great questions regarding the obstacles and dilemmas that early-stage entrepreneurs face. I’ll take this opportunity to cast two of the main dilemmas we were asked on through the lens of the above three challenge categories.
1. When and how to approach VCs?
Personal: Amiram bravely shared the many times he received a hard “no” from investors, including when he was advised to leave his startup behind and find a full-time job. I like to joke about the danger of entrepreneurs actually listening to what VCs tell them, but founders do have to face refusal and have strong inner faith.
Managerial: Raising money is an art form not everyone masters. It’s perfectly natural for entrepreneurs to be in love with their companies, but it shouldn’t turn them into mediocre fundraisers. When you approach VCs, fight the urge to escape to other corners you’re more comfortable with, like developing your product or dealing with clients. Make sure that you manage the process and prioritize developing this skill.
Strategic: There’s no such thing as a right or wrong time to raise funding. When visiting a company’s career page, we often come across a paragraph inviting candidates to apply even when there are no open positions. That same logic that doesn’t want to miss out on great talent just because there’s no vacancy to fill should apply to funding. When opportunity knocks, answer the door even if you weren’t expecting company.
2. Finding the right co-founders
Personal: Amiram and I both agreed that the crystallization of a co-founding team is nothing like recruitment or executive search. Founders typically find their co-founders in their close social and professional networks. It’s all about human chemistry. You have to really know the person and understand why you can build a true partnership in the deepest sense of the word. That’s not always possible, but still highly recommended. Trusting your gut is scary, but it’s the only way to go.
Managerial: Although love and chemistry are crucial, you must frame your relationship with co-founders in a formal and structured way. Like prenups between married couples, founders’ agreement is not a ride in the park, but it is the only way to make sure everyone is happy, and all relevant material matters are covered. For that, you need a good lawyer who will make life easier.
Strategic: Some entrepreneurs worry that being a sole founder hurts their chances of raising money. They’re not wrong, but that’s no reason to partner with people who are unsuitable for you or, even worse, whom yo u don’t even know. If you believe in your vision and capabilities, savvy investors will recognize and appreciate that. One is perhaps the loneliest number, but two founders don’t necessarily make a stronger team.
Amiram ended our webinar with an open invitation to approach him with questions, and I’d like to do the same. If you’re struggling with entrepreneurial challenges, don’t hesitate to approach me and the SOMV team. We all face dilemmas, but we certainly don’t have to face them alone.