Running with VC’s gives you battle scars!

Just recently there was a job posting on TheFunded.com from a start-up software company in the Bay Area looking for a CEO.  In the list of necessary qualifications was;

“We seek people with “scar tissue”. We want to know that you understand start-ups and have dealt in the past with the dozens of different kinds of problems that every start up has.”

When I started in playing the high finance world of venture capitalists, I had no battle scars. I believed that people worked together for common causes and VCs wanted to help you grow your company.

Picture sunny days and birds singing.

Now picture a hunter shooting those birds…

That pile of chirp less feathers could be your dream if you’re not careful.

As grown-up and sophisticated as we think we are now over our ancestors, (think Geico caveman commercial), life really hasn’t changed for a million years. Especially when it comes to the world of business and “money”…

Here the harsh reality: If you wanna play in the VC world of start ups, you need to live Darwinism in real time.

The weak and naive get crushed. Only the strong survive. Remember those cave drawings of the dude with the spear stabbing the leaping lion? You have to be that guy.

So here is my no-nonsense advice about how to survive:

1. Never fight alone. Get your self a great lawyer that represents founders and NOT VCs. To find that guy ask other founders who they have used. Don’t ask the lawyer for references; he will just give you only good people to talk to – those without scars.
2. Never go to battle unprotected. Make sure you have an employment agreement. I know you’re saying, “What is she talking about, it is my company and I am the CEO, why do I need that?” Here’s the deal – you need to have in writing what your own deal is, so that new VCs on the scene have an idea of what you believe are the key terms for you to work there. Writing trumps chit-chat. Just like “dude with spear” trumps “spear less running dude” in a tangle with the leaping lion.
3. Don’t simply focus on valuation and 51% ownership. The non-monetary terms will KILL you. I have seen so many outrageous non-monetary terms in term sheets of late. It is as if the VCs are saying, “we don’t like risk, so we’re going to put you under tight operating restrictions, so we can control what you do.” Being controlled is likely something you didn’t think you were signing up for. It’s hard to survive for long when the breathe is being crushed out of you.
4. Get help from battle-scarred founders. The great news about battle scars is that most people only have to get hurt once to remember to never to do that again. Hearing the lessons learned from others will help you know what to avoid. Reach out for help. And don’t waste other people’s time. Get to the point quickly .

You can get hurt if you choose to swim with sharks on your own. Sometimes pretty bad. This process can kill you if you let it. When you eventually exit your company for huge dollar amounts both you and your VCs will love each other again. So suck it up, watch your back and go play with bravery!

Want to share your battle scars. I’d love to hear them! Leave me a story (or two) below in the comments.

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