My co-founder, Alice, and I have worked with thousands of founders since starting Entrepreneur First (EF) ten years ago. There are some common (false) beliefs that often hold founders back:
Investors won’t be willing to meet with me
When Alice and I started Entrepreneur First, neither of us had met a venture investor before. We assumed the bar for getting a meeting with one – let alone actually raising money from them – would be impossibly high. If you’re in the same position today as we were then, the good news is that not only do VCs exist, but there are more of them deploying more capital than ever before – and, in general, if you’re building an ambitious company, they actively want to meet you.
You’ve made it once you’ve raised
Headlines in the tech press often emphasise how much capital a company has raised. Despite its salience in startup culture, raising capital is not the goal. It’s a milestone, but it’s only the fuel that you use for the next step of the journey.
You shouldn’t elevate any particular source of financing to a goal in its own right. Just as there are some people who glorify raising from VCs, there are others who treat bootstrapping like a religion. Your financing strategy is a business decision like any other. Think carefully about your company’s needs and choose accordingly.
Investors are just a way of getting money
Our closest investors are people we speak to sometimes weekly and certainly monthly. Investors can become some of your most valuable advisors and supporters. Good VCs are experts in company building. They may not understand the intricacies of your company as well as you do, but there’s a lot of pattern recognition around the core challenges of maturing a startup.
You should choose your investors wisely. Make sure that you’re broadly gunning for the same goals, not just financially, but in terms of culture, values, and mission.
Culture comes from the mission statement written on the wall
Culture isn’t a one-liner you come up with in an afternoon and stick on the wall. Culture comes from you. When it’s just you and your co-founder, the way you work together is the culture. Even if you’re not deliberate about creating your culture, people will inevitably start to imitate your behaviours, and the behaviours you praise. Praise is currency, so people will (consciously or otherwise) adapt their efforts to earn it.
Culture is the ultimate source of leverage within a startup, and a huge competitive advantage when it comes to hiring. Great people want to work in companies with great cultures. Your culture should create a sense of meaning, autonomy, and impact.
Diversity can be fixed down the line
It’s a mistake to put off diversity and inclusion because you believe you’ll have more time to sort it out later on. If your first few hires form a homogeneous group, the problem is only going to exacerbate itself, as people tend to hire people like them. Instead, bake in a diverse and inclusive culture from the start.
If only X happened, it’d be a game-changer
When you hear yourself saying something along the lines of “If only X happened, it’d be a game-changer,” you are in a step-change fallacy mindset. You’re looking for one big thing to permanently change the trajectory, or fate, of your company. The X might take the form of press coverage, a particular hire, a new customer, the next raise. While successful companies do tend to achieve these things, it’s rarely ever the main goal.
These things are often a consequence of unglamorous, dedicated hard work, as opposed to being the cause of success. The glowing writeup in a top publication or the Series A from a famous investor seldom matters relative to the day-to-day work of the business.
There’s no single, repeatable path to startup success. Despite the abundance of advice out there, what’s important is that you forge your own path. Accept that no founder has all the right answers, and setbacks are inevitable. The key is to keep pushing forward regardless.
