When Founding a Startup, the Conversation Starts at Home.
The cabal that makes up a startup journey goes far beyond the founding team. You owe it to your loved ones to talk it through.
Incorporating a company is easy. Starting a company is hard. Seeing it through to the end is an almost impossible feat of endurance and tolerance for pain. Successful founding teams know this, and experienced founders plan for what’s in store by comprehensively talking things through. These conversations should happen long before they carve up the equity, draw up the shareholder’s agreements and start down the long and winding road together.
Curiously, many founders don’t follow that train of thought to its natural end station. You wouldn’t dream of training to climb Everest without a proper support network around you — and the decision to start a new company should be no different. For most of us, that support network consists of your closest friends and family.
Much as been written on the sacrifice of entrepreneurs. The embittered “I haven’t seen my friends in months” or “I barely remember what my husband looks like” rolls off the tongue all too naturally. It shouldn’t be that way — it isn’t a sustainable way to live your life — and yet, many of us have been there, more than once. I find it surprising, then, that so few of us have considered bringing our closest friends into the conversation around starting a new company. Your partner, children, and closest friends are as much of the equation in the early days of a new venture as your co-founding team. They probably ought to be part of the conversation from day one.
Conversations you need to have
Before setting off on a startup journey, it’s important to have a conversation about expectations — make it explicit what you believe will happen in the course of this company. How much personal financial risk will you take on in the process?
These conversations won’t be easy — not least because you may be talking about dreams that may not be compatible with your joint vision for your future. Nonetheless, it’s important to get clarity on the potential risks and rewards of running your own company, so it’s a conversation worth having.
- How much of your savings are you expecting to burn through in the process of bringing your product to market? This is a crucial question, especially if the savings are ostensibly earmarked for other purposes, such as a mortgage deposit or the kids’ college fund.
- Salary — When founding a company, it’s likely you’ll take a pay cut — at least for a while. How much of a pay cut and how long for? Can your family still afford your rent, food, insurances, and other life essentials?
- Work/life balance — what are your expectations for how much you will be working? Will there be space to take time off? How many hours per week are you expecting to be working? How often are you expecting to be in ‘crunch time’?
- What are the measures of success for this business? Or, put differently; under which circumstances would you throw in the towel, deciding that perhaps the venture you started isn’t destined for success?
- What’s the plan for when the venture is complete? After an exit or potential failure, does your partner expect you to take a ‘real’ job again? Can you dive right into your next venture? Does your partner potentially want to have a go at founding a company?
- What if there are changes in your life situation? Say, for example, that you are planning to have children over the next five years — how would that impact your decision to continue running this company?
- Timelines — What is a rough timeline for each stage of the business? Say you are expecting to raise some angel funding and take next to no wages for the first 18 months; what happens if the next round of funding doesn’t happen as quickly as you hoped? What if the business turns out to be somewhat profitable, but it doesn’t look realistic to raise further money?
Make the decisions together
By being your financial and mental safety net, your support network is making their own set of sacrifices, and it’s important to be cognizant of that. Talking through those risks and rewards with your loved ones is the first step— and it’s important to make the go/no go decision together.
So why do I, as a pitch coach, care? I see a lot of startups at the earliest stages of their company building — and I sometimes work with teams who, in their enthusiasm, haven’t thought it all the way through. Surrounding yourself with great advisors and a good team is important — and your life partner is absolutely part of your advisory board and your team, whether they are actively involved, or not.
Haje is a pitch coach based in Silicon Valley, working with founders from all over the world to create the right starting point for productive conversations with investors — from a compelling narrative to a perfect pitch. You can find out more at Haje.me. You can also find Haje on Twitter and LinkedIn.