Building a startup can be extremely rewarding, but movies tend to gloss over the hard work and hardships involved.
In my line of work, I come across hundreds, if not thousands, of startup founders every single month. A majority of them happen to be based out of San Francisco and are running some type of venture-backed tech startup or healthcare tech startup. For many entrepreneurs, ‘tech startup founder’ is a job title they have been dreaming of putting in their Facebook and LinkedIn profiles since the day they learned what the word entrepreneurship means. I mean, what is there not to like about being a startup founder? You can be your own boss, network with influencers, raise money, work in a cool office and ultimately get super rich.
What People Think They Do
There is a lot of entertainment value that can be derived from these types of stories. For example, the TV show Shark Tank has earned millions of dollars and has one of the largest viewership of any show on CNBC.
The Social Network, a movie that shed some light on Facebook’s beginnings, shows the fun side of entrepreneurship by depicting a group of friends partying late into the night in a nice house in California, challenging their hustling skills through coding competitions and getting girls by showing off their money.
The media has consistently made tech startups look sexy by showing the lives of tech giants such as Mark Zuckerberg, Elon Musk, Steve Jobs and more. Consequently, the entertainment value of these high-end tech entrepreneur stories have encouraged many tech wizards to build their own startup companies or develop their cool apps, as opposed to joining an already-established company as an IT engineer or software developer.
What They Actually Do
While there is obviously a lot of truth to some of the perks mentioned above, the hardships of entrepreneurship are often not highlighted by the media. Being a startup CEO can be extremely rewarding, but it’s not easy by any means. There are some hard costs that come with the perks: Low pay, long hours, monetary risk and high stress are some of the most common complaints of founders that I regularly come across. The euphoria of building a tech company with your buddies comes with its own sense of torment.
Most startups begin with some sort of idea, either from a problem the founder himself is facing or a common problem many people in her industry are facing. The biggest high that founders experience is knowing that they are chasing their dreamsand building their own company in their own way. The thought: “I can do this, and I can do this better than anyone else out there who is trying” is often a strong catalyst for starting a company. However, that same thought can eat you alive from the inside out. You can start to see spending time with friends and family, playing sports or participating in other extracurriculars as time wasted.
You might begin to feel like if you are not working on your startup during those hours, you are falling behind. You might feel a false sense of guilt every time you say yes to going out with a friend or every time you tell your family that you can join them for dinner. When you are starting out as an entrepreneur, make sure that your idea is solid. Make sure you’re building something people will want and pay for. Starting a business is quite often a pretty lonely process. Unless you have a co-founder in the company, for the most part, no one will care as much about your company as you do. The reality is that you can be prepared, have a brilliant idea and have customers, but that isn’t enough to get a startup off the ground.
You need money — investment.
And this usually means securing angel investment or getting access to venture capitalists.
On TV, angel investments are shown off as people in fancy suits passing off cash left and right as if they are running for office. But, in reality, VC fundraising is really difficult. Also, taking money from angel investors comes with a completely new set of issues and losses which you have to deal with sooner or later. The amount of stress that comes from raising money is too much for a lot of new entrepreneurs.
Investments Come With a Series of Strings Attached
The whole process of fundraising is hectic in itself. It’s a long process. You are likely to get rejected by many, and it certainly can be a huge distraction.Ultimately, as a startup founder your job is to build your company, not raise money. The good news is that starting a company and raising money to scale it might be much easier today than it was a few decades ago. But it is by no means headache free. And the money is not free either.
As soon as you raise capital, you enter a partnership with someone else who wants to see their money grow into more money — lots more money. The good news is that most investors invest in startups because they have faith in the team behind them.
The investors usually come with an abundance of knowledge, wealth and expertise, which will help you get your startup to the next level.
BusinessCollective, launched in partnership with Citi, is a virtual mentorship program powered by North America’s most ambitious young thought leaders, entrepreneurs, executives and small business owners.