Every so often, I find myself at odds with a particular bit of conventional startup advice. Usually, the advice starts out as an innocuous one-liner bequeathed to me that I’ve re-gifted to others and, at face value, it may make perfect sense.
But at a certain point, the advice gets so blown out of proportion that it loses context. Eventually, it becomes something less than helpful. In extreme cases, it can become harmful.
That’s when I open my big mouth and get all contrarian.
The last time I went on such a rant was over advice concerning our startup community and the growing number of startup-related events that were popping up everywhere. Long story short — conventional wisdom was that there were too many startup events and the advice was that we needed to stop having so many startup events and entrepreneurs should stop going to startup events and get back to work.
This was almost exactly two years ago, so my story needs some context of its own.
The ExitEvent Startup Social was one of the first (if not the first) in a new wave of startup-related events that sprung out of a revitalized startup community in Durham. Yeah, there were startup events and meetups and such, but ExitEvent was sparked the night I went to a startup event attended by 100+ people and wound up talking the whole time to the only other entrepreneur there.
I remember what that was like. I remember when there were exactly zero honest-to-goodness startup events in my startup community. And it sucked, way more than being a little bit annoyed by getting the umpteenth startup-related Evite in my inbox.
So when startup events started exploding shortly after ExitEvent exploded, including two events that spun out of an ExitEvent Startup Social on the same night, my response was rock on, go for it, make some noise.
And when there was a backlash, my contrarian response was: Good entrepreneurs will find the value in good startup events and both will persevere. Shitty entrepreneurs who do nothing but event-hop will gravitate toward the shitty, glitzy events, and both will fail.
Now, let’s talk about success.
Or rather, let’s talk about what defines success for a startup.
The July ExitEvent Startup Social was a smashing success. Over 100 entrepreneurs and investors gathered at the back bar at Top of the Hill in Chapel Hill. There were new faces, including a couple new investors. I can also say that since the acquisition, ExitEvent is growing at a good clip and in the right direction.
I missed last month’s Social, mostly because I was on vacation, but it was a necessary vacation due to having worked my ass off during the closing stages of a $5.5 million Series B at Automated Insights.
Once the Social wound down, I went for burritos with a friend of mine who had also announced a seven-figure raise shortly after we announced ours.
We had a good talk, and this is what hit me on the way home.
I’ve always subscribed to the general notion that raising money doesn’t equal success. In fact, at Monday’s Social I was asked by a relatively new founder (but one with some traction and local hype), about when he should start thinking about raising money.
My first blush at an answer was the standard “Don’t raise money unless you absolutely have to.” In other words, if the fences you are swinging for can’t possibly be cleared without the kind of infusion that you absolutely can’t scrape together on your own, then yes, you should be thinking about raising money.
The entrepreneur then spent 10 minutes talking about his model and his plan. And it became obvious.
“Wait. Don’t raise a dime. You can get to revenue without it and no one is breathing down your neck. Do that.”
That’s context. That’s general solicited advice followed by a specific recommendation that matches the advice-seeker’s unique situation as closely as possible given the allotted time.
It’s not “Raising money doesn’t equal success.”
That’s admonishment. That’s a bumper sticker. That’s akin to “Being rich and famous is such a drag” multiplied by #disruptiveinnovation.
In other words, it’s so Valley.
Show me the startup outside of the Valley that can finesse VCs with a wink and a smile and 99% of the time that startup probably has a game-changing product and a solid team and is just better than everyone else at raising money.
So don’t just broadcast to entrepreneurs outside of the Valley that raising money doesn’t equal success, because raising money outside of the Valley is DAMN HARD and it’s a pretty big win.
There are far more talented entrepreneurs with great ideas and solid teams who can’t raise money than there are wantrepreneurs working on the next Yo clone with the sole purpose of a quick Series A.
In fact, if there are any of the latter here, I didn’t see them Monday night. And I’m pretty sure they weren’t at a bigger, glitzier, low value startup event, because most of those have failed.
You want to make a startup community feel like a closed club? You don’t have to pepper it with startup events. All you have to do is make early-stagers feel like the finish line is a million miles away.
Yeah. I get it. Raising money doesn’t mean you’re done. But the good ones know that and if they don’t they’ll figure it out.
The bad ones? They’re not going to get the money to begin with.