[This is a weekly series that brings you raw, first-hand experiences from founders and investors in the trenches. Their story submissions are anonymous, allowing them to share openly without fear of retribution. Every Wednesday, we'll run one new story chosen by Dana Severson, who operates StartupsAnonymous, a place for startups to share, ask questions, and answer them in story-length posts, all anonymously. You can share your own story here.]
I started an angel fund a couple years ago. The goal was to make an impact, stay tuned into entrepreneurism, and make money. We haven’t made much money yet, but we haven’t really lost anything yet either.
The easiest “No” I ever delivered was to a group of cofounders who all drove luxury cars. Their idea was OK. We had our doubts about their ability to execute, but the hope was that they were coachable and so we set a follow-up meeting.
One co-founder drove up to my place in an Audi; one drove a BMW; one drove a Mercedes. The fourth co-founder was riding shotgun in the BMW. There was no need to spend time talking about where this company was going, because this company was already dead.
The luxury interests of the “startup” cofounders made it clear that our money was not going to help keep the lights on and pay a few server bills. Our money was needed so that these guys didn’t have to suffer a bit. They were not willing to go “all-in” on their business. They were not selling their cars, and it was safe to presume that they had nice garages attached to some pretty awesome houses, too.
If you’re not “all-in,” neither are we. If you’re serious about a startup, be ready to be paid last. Sometimes it’s the only way for your company to survive and t have enough cash to make it to the next round. At the very least, borrow your cousin’s crappy Corolla to roll up at your next meeting with your investors.