“How many lives do I have left?” I asked myself. My goodness, I’d already survived a ton of near-death experiences, yet we hadn’t even released a product or gotten any funding. Maybe the startup gods were trying to tell me something?
But this near death experience was different. I survived this near death experience not because of any great talent or skill that I had, but just because of sheer luck.
I was meeting with Gill, a potential investor in our company. We had already gone through pitching his partners and deep dive due diligence.
All that was left was for Gill to give me a term sheet. But he had an interesting question for me after we shook hands.
“I was meeting with Jim from Scale Ventures, and he said he met with a really good Analog team. Was that you?”
“Yes, it was,” I said. “We had a really good meeting with Jim, but he likes investing in B rounds, not A rounds.”
Gill nodded his head. Then he said, “I’m ready to give you a term sheet.”
You need to be lucky to be a successful startup CEO.
I knew exactly why Gill asked me that question. He knew because I had told him (remember, it’s always better to control the story) that the two people I originally founded my company with, “Jim” and “John”, had quit and started their own competing company.
Gill apparently believed, like I did, that only one our companies was going to get funded. We had dodged a bullet because if it wasn’t us I’m not sure Gill would have funded us.
That was luck, not skill.
Then we got even luckier. Jim and John pitched their company around the same timeframe to Lip-Bu Tan , the head of Walden International. Lip-Bu gave them a term sheet, and for some inexplicable reason, Jim and John turned him down.
How lucky could we get? Very lucky it turned out.
You will have luck work against you too as a startup CEO.
The economy was doing just fine when we started raising our initial funding. Then the Great Recession hit. That was a piece of bad luck that we couldn’t avoid.
It was literally impossible to get investors excited about anything. The only thing that saved us (I guess this is luck) was that my cofounders and I had the financial means to weather the storm.
Your grit as a startup CEO gives the ability to have luck.
There’s no question you need to get lucky if your startup is going to succeed. I’ve certainly seen that play out in our case.
There’s the old saying that you create your own luck. And, to some extent, I believe that.
For example, Pandora was turned down over 300 times before they scored funding. The reason we know of Pandora is because Tim Westergren, Pandora’s founder, has grit. Westergren could have given up at any step along the way, but he didn’t.
The reality is good luck alone is not enough for you to succeed, but you absolutely, positively need luck.
I always remembered when I was EIR (that was a lucky break too, btw) the partners at the VC firm telling me that they invested in one company for every 100 they had a face to face meeting with. You’ve got to have everything going for you if you’re going to beat those odds.
And one of the things you’re going to need is luck:
- You’ll have to be lucky to be in a sector that investors are interested in investing in, and…
- You’ll have to be lucky to meet with the right investor at a time when that investor has the ability to invest in your company
Yes, you will need skill, and tons of it, to get the investor to invest. And you’ll likely need grit too as it will likely take you time to meet with the right investor. But never forget how lucky you are that everything lined up just right for you and your company. It easily could have gone the other way.
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