Handling The Bad Days Is Key To Your Success

Businessman slipping on a banana peel, VECTOR, EPS10

“As you know, Brett presented to my partnership at ‘Donald Ventures’,” “Raul” said to myself and the other board members at our board meeting. “And the meeting went horribly.

[Do you want to grow your business? Maybe I can help. Click here.]

“None of my partners believes we should continue supporting the company,” Raul said, then he twisted the knife. “So, we are pulling our support for the next round of funding. We think the company should be sold. However, maybe we’ll raise the flag and put in $1 million into the next round.”

And with that, my whole world changed.

Two weeks earlier, our funding was assured. Now, we were on life support.

At the end of the meeting, Gill, our other investor, motioned for Cathal, my friend and fellow board member, and me to stick around to talk. Gill waited for the other board members and Marcia, our lawyer and board secretary, to leave the meeting.

“I don’t think Raul wanted to say what he said,” Gill said. “He’s very careful with his words, and did you notice how was fumbling for words?”

“Yes,” Cathal said. “But what good does that do us?”

“Let’s wipe him out!” I said.

“Now’s not the time for that,” Gill said. “It’s important we understand what’s going on at Donald Ventures.”

Gill repeated himself again, “Raul’s very precise with his words. What’s going on at Donald Ventures?”


Everyone in your company takes their lead from you.


That day was the worst day I had to date as CEO. I’d been through a lot, but nothing as bad as having one of our two lead investors walk away from the investment.

The next day, as we always did after our board meetings, we had a company meeting to update the team on our progress. Everyone on the executive team would talk about their areas of responsibility. Then I would wrap up with a Q & A, and an overview of our progress.

I’d been punched in the mouth by Raul the day before, but today I had to show the team that Raul’s punch didn’t knock me out. The stakes were pretty high.

If my talk radiated with fear or anger, the team would take their lead from me, and the result might be that we’d start losing people. If I hit the right note, and explained, honestly, that our investors wanted us to raise more money from outside investors, then the team would take their lead from me. 

So, as I started my talk, I wondered what the team would think:

  • Was I worried?
  • Was I calm?
  • Did I show the team that I thought everything was on track?

I went through my talk, and I explained the new request from our investors. The team seemed satisfied as if it was business as usual.

That night, Cathal and I met Aldo’s, a restaurant in Los Altos near where we lived, for a glass of wine and some calamari. I think Cathal wanted to give me a pick me up which I greatly appreciated.

We talked through the change at Donald Ventures. “It just doesn’t make sense,” Cathal said. “The company is doing well. It has to be something not related to us.”

“That means it’s related to Raul,” I said. “I’m having coffee with my friend Alain next week. He knows Raul. Maybe, he’ll have an idea that can help fill in the blanks.”


You need to keep your head in the game.


We plowed ahead on our new plan to find other sources of funding now that Raul and Donald Ventures had thrown a wrench into our plans. We had a good story to tell, and we quickly started to get traction with potential new investors.

I met with my friend Alain for coffee as planned. Alain was a partner at the VC fund where I was previously an Entrepreneur in Residence (EIR).

I told Alain what happened with Raul and DV, and he said, “So, it’s true that Raul and Donald are fighting.”

“What are you talking about?” I asked Alain.

Alain smiled and said, “There have rumors that Raul is on the outs, and that Donald has grown tired of him. What happened with you confirms it, don’t you see?”

I motioned for Alain to continue his explanation.

“With the revenue, customers, and execution you have, there’s no reason for an investor to stop backing you. However, knowing Donald’s reputation, killing Raul’s investments is consistent.”

I shook my head in amazement. “So, Gill was right. Raul was stumbling over his words when he told us they (DV) were backing away. Gill felt this wasn’t Raul’s idea. Now we know it was Donald’s.”

“That’s right,” Alain said.

“The only problem is, while it’s great that we know, we still have to find investors that hopefully are okay with Donald Ventures not following their hand.”


You can’t care what the odds of success are because they don’t apply to you.


When a large investor like Donald Ventures doesn’t put in their pro-rata into the next round of funding, it sends a very negative signal to potential investors. The question becomes, “What does Raul know that we don’t know about the company?”

Making matters worse, Raul was arguably the most successful venture investor ever in our space. It couldn’t be good if he was backing off.

Somehow, I blocked all the problems out. We had a term sheet within one month of starting our fundraising.

Gill and Raul approved the term sheet within 24 hours of us receiving it. That’s the end of the story, right?

Two weeks later, in a meeting at his Sand Hill Road office, Raul reversed course and said we should sell the company, and the term sheet was no longer acceptable to Donald Ventures. This led to a heated argument between Raul and me.

Raul kept calm, and I lost it. After 45 minutes, I left his office. I looked at him, and, as calmly as I could, I said, “I’ll prove you wrong!”

Over the next eight months, we received three more term sheets. Raul blocked them all, trying to force us to sell the company.

Finally, we were out of cash, but we had a deal that required none of Donald Ventures money. Raul blocked that deal too. We would have to shut the company down.

We had one more card to play. We had a loan with Silicon Valley Bank, and I didn’t think SVB would be happy to lose their money.

I called SVB and asked for their help. I told them we were shutting the company down the next day.

Bilette, my contact at SVB, said, “I don’t know if we can help, but I’ll see what we can do. Send me everything you can about Donald Ventures.”

I was up late into the night emailing Bilette documents. Our emergency board meeting was scheduled for 10AM.

The meeting started, and we hadn’t heard from SVB. Then, at 10:05 AM, Raul called Gill. Gill left the conference room, and then he came back.

“Raul and Donald Ventures have agreed to let the investment go through. Naveed (DV’s representative on the board) will resign from the board.”

And, just like that, we were saved at the last minute. That’s why you need to keep your head in the game when you’re having a bad day or year.


Do You Want To Grow Your Business?  Maybe I Can Help.  Click Here.