If I go there will be trouble, if I stay it will be double. -- The Clash
Have you ever reached that moment in your startup business when your faith in your idea and in yourself is severely tested? You invest a significant amount of money to get things started, build a prototype, prove the concept. You'd like to bring in angel or venture capital investors to get you to the next level. You've spent more from your personal funds than you intended. You've relied on consultants and freelance developers so far, but in your gut you know you need much higher-level, dedicated technology resources to push your development to the next level so that investors with deeper pockets will jump in.
So, you're at that proverbial fork in the road. You could write yourself another sizeable check from your savings, or from your IRA or 401(k), or from your home equity, but you really don't want to do that because it will make you very uncomfortable. What do you do? Here are a few ideas to get you through this period.
- Realize you are not alone: You have plenty of company. Startup mode is not an even, linear path. If you're a parent, did you ever take a Lamaze class to help you understand what child labor would be like? And then what happened? It wasn't like that at all! It was totally unpredictable and all that breathing stuff went out the window. So understand that what you are going through is normal, and try to relax.
- Evaluate your choices: Let's say you could, if you wanted, get your hands on the next $10,000 or $100,000 you need to get your startup to the next level, and you feel that if you get there, you'll be able to bring in a $1 million investor. But you're really nervous because you only intended to invest right up to the point where you are now. Many entrepreneurs would say, "Damn the torpedos, full steam ahead" at this point. But this isn't a movie -- it's your life. You're being tested on a few things at this moment: whether you really believe your idea is right and whether the tradeoff of continued personal funding for sleepless nights is worth it.
- Get creative: Realize that choices at these junctures are rarely binary -- do I stop or do I go on? For example, if you've run low on cash and it's too early or not possible to get traditional investors or lenders at this point, can you hunt for individuals you can sell on your vision who will work for equity in the venture? Can you approach a business incubator that can offer human resources and space in exchange for equity? Make a list of at least five options that are available to you, and don't settle for just Stop or Go.
- Leverage your network: Too many entrepreneurs walk the factory floor alone, so to speak. They get into their own heads and all they hear are echoes. Go out to your network. Fire up LinkedIn, Twitter, Facebook and put it out there. Ask for help! Gals know how to do this. Guys, not so much. So guys, get over it and seek input and creativity from friends.
- It's okay to stop: It is perfectly all right to put a business on the shelf. I'm avoiding the term "pull the plug" because it's macabre and stopping development of a business is not any kind of death. It's just business. We tend to over-emotionalize decisions like closing a business. It is not "your baby," as many people believe. Only your baby is your baby. A business is just that -- an inanimate concept. Yes, you've sweated blood over it. But look up a very useful business term -- sunk cost -- and understand it.
- Don't listen to other people -- too much: Your mother will tell you to throw in the towel and she'll make you chicken soup. Your father will say, "Keep going, you can do it!" Your spouse will say, "Please, please stop the madness and get a job." Hear all of them, but don't listen to anyone but yourself.