* If your payables and debts are all in the company's name, nobody is coming for your house. The likelihood that your business was going to die before you could pay all your debts was priced into your contracts. If you have employees, pay them and get them off your books first; employee wages are, depending on the state you're in, the one likely exception to that rule.
* If they were in your name, well, that sucks, but still nobody is coming for your house. Your credit rating will probably absorb all the damage. I've had shitty credit all my life, so much so that it used to make it hard to get checking accounts (I'm not a deadbeat, I just don't have revolving credit, and do have billing disputes that I don't have time to resolve). Shitty credit is not that big of a deal. Just don't use credit.
* It sounds like your wife is right. The existence of startups isn't a guarantee that you'll never need to work for someone else again. The normal life cycle of a startup founder is, (1) work for someone else, (2) start company, (3) run company into ground, (4) goto 1. Think of it this way: had your company been successful, it almost certainly would have left you in a state where you'd be working for someone else for a couple years during your earnout. "Not working for someone else" was never really on the table.
* Getting a company funded and then running it is a resume plus. You won't have more trouble getting another job than you did getting the one you left to start this company.
* Your investors expected you to fail. The odds were always overwhelmingly that you would. The whole startup investment model is, put money into 10 companies, hope 1 succeeds. Your investors are professionals. Let their problems remain their problems.
* Are you going to get ridiculed for failing? Obviously, you're not an HN reader. You'd have gotten ridiculed for succeeding. Ridicule is the air we breathe. Why do you care?
* Most small companies start from nothing. That's good news, because "nothing" is an easy state to achieve. Give yourself a couple years, and then try again.
In addition to Thomas being right about employee wages being able to "pierce the veil" in many states, they're the people most at risk in this situation, so you owe it to them to make sure they're taken care of. It's the one circumstance where I would backstop a company problem with personal funds. (If your company was also behind on e.g. rent or hosting, on the other hand, that risk was priced into contractual terms, like Thomas said. I'd generally prefer to make vendors whole where possible but I wouldn't lose sleep over it.)
With regards to your own situation: you're in the best hiring market in the history of ever. Reach out to your incubator's network and you'll have attractive job offers starting as early as you can accept them. That isn't the whole of the solution set: Big Daddy G and the rest of the tech industry are hiring like mad, too, and they are also throwing around signing bonuses large enough to cover your last few months of salary nonpayment.
P.S. to other HNers: "And then we didn't pay ourselves salary" strikes me as something I hear from a lot of failed funded startups which magnifies the personal financial risk of doing them significantly without meaningfully increasing the chance you'll pull things through. I'd strongly consider not doing that, again, unless the alternative is missing payroll for your other employees.
At the top of your payment priority list: Remit to the U.S. Treasury the required withholding for employees' federal income-tax and Social Security / Medicare tax. The IRS will come for your house if you don't.
> * Are you going to get ridiculed for failing? Obviously,
you're not an HN reader. You'd have gotten ridiculed for succeeding. Ridicule is the air we breathe. Why do you care?
Haha, so true. Failure is lauded; success is criticized and mocked mercilessly.
THANK YOU!
I came in here to write something similar, but you said it much clearer.
I was lucky - when my first Startup Free.TV died, the company did not go bankrupt, but it did kill my credit.
I was also worried about what I would tell my wife - the great news is is was VERY hard, but she stood by me and we are still married ten years later.
I have eventually gotten the courage to start another startup, but now is that I now know how the system works and will not sell equity for peanuts anymore. This does hold me back - I would not say I am scared, just more careful.
There IS life afterwards. If you want to talk, email me HACKER at Free dot TV
You realize that your credit record effects more than just your ability to get credit and other financial services right? Insurance companies will sometimes deny coverage based on information in your credit record. ie: health insurance.
> Think of it this way: had your company been successful, it almost certainly would have left you in a state where you'd be working for someone else for a couple years during your earnout. "Not working for someone else" was never really on the table.
Wow, I'd never really thought about it that way before. You're completely right, of course.
It's just rather depressing. Maybe I'll go re-read Rework.
You know, some personality types cannot help but be concerned with how they're perceived by others. They're hardwired that way. It's the classic misunderstanding between extraverts and introverts.
Having been through shutting down my previous startup just a few months ago I can say that my experience mirrors this quite closely. Its scary and stressful at the time, but at the end of the day, nothing bad happened and nobody ridiculed us. In fact, everybody (including our investors - some of which are involved with us again) was quite positive and everybody sees it as a positive learning experience. And being able to say that we're on our second startup has been beneficial too.
> But, I can’t imagine working for somebody else. I wish my wife understood that.
She's understood it long enough to let you pursue the dream of your life at great costs for her, maybe now it's time for you to do some sacrifice for her and go work for someone?
You're not the first one to have to do that and, you know, survive.
“I can’t go much longer without a paycheck. But, I can’t imagine working for somebody else. I wish my wife understood that.”
Change your perspective on this.
I’m a co-founder of a successful and growing business. I’ve got around $2M liquid and who knows what on paper. I’m decently rich headed for pretty damn rich. In the last week, I’ve changed light bulbs, picked up bugs with my hands (no tissue close, wanted to get it and call the bug guy before people saw it), swept the floors, took box trash out to the dumpster, cleaned some toilet stuff (will leave it there) and just generally served people on my team in any way I could. I find ways to do it because they are talented, could work anywhere and choose to work here. So I serve them. Also, I have deep relationships with them and I love them. I want to win with them.
From your words, I worry that you don’t understand the point of the game you are playing. If you want to run any successful team be it a business, a non-profit, a 5th grade little league ball club – you are servant in chief. Others exist in the world. You aren’t really ever by yourself or for yourself. Work on being and building a team. Make meaning and tie it to production. Start by being the best teammate you can be. Being an employee in an intense and well managed company is a good place to learn this skill.
To me the key point was this:
If you want to run any successful team…you are servant in chief.
Most managers completely miss the "servant in chief" bit.
Thank you. This was my sentiment but didn't comment on it. There are very few things in life that are only "one time only".
Build the cash reserves, get back on a stable financial ground and go ahead and try again.
Sometimes the myopic tendencies of these stories really drives the point of how self-absorbed one can get with this. Working for someone else likely means a nice office, nice chair, nice desk, nice computer and monitors and the ability to sit down for 8-9 hours a day and use your mind and likely a decent salary.
I think for the vast majority of people in the workforce that do don't software development, that's not surviving but thriving.
As your post seems to indicate, you're scared shitless right now and it seems like the entire world is coming to an end. Trust me, even if it really seems that way, it's not.
For now, grit your teeth and go through the bad stuff. Tell your wife. Be honest with her. No matter what, she's your wife for a reason- she'll support you through all of this. If you neglected your relationship with her a bit because of the startup thing, then she comes first now. Then tell your investors. Tell your employees. Tell whoever else you need to tell. Be honest, genuine and straightforward. The next few weeks are going to suck big time, but you'll get through them.
Once the big stuff is behind you, take a few weeks to breathe, if possible financially. You're coming to the end of a long, arduous journey, and that's always something hard to process. Try to find joy in the little things that you didn't have the time for during your founder mode. Have brunch with your wife. Go take a walk alone in the forest. Read a book. Take time to recover.
You will find another job. You don't realize this right now, but having run a startup for 2 years gives you more skills and experience than others have developed in a lifetime. If you have to take a job right away because of financial hardships, take something low stress (consulting/freelance could be a good choice, for the flexibility, although it can be hard to get started with no leads). Now is probably a bad time to do another startup. Also, you probably want to use this as a lesson to remember that you should always have ~6 months of expenditures in the bank that you NEVER touch precisely for situations like this one.
Don't worry about the investors. It's part of their job - you're not the first startup that they funded that failed, and you're not the last either. Be professional with them- if you want to do a startup again in the future they will remember your honesty and ethics more than the fact that your startup failed.
You ran a startup for 2 years. Solely by doing that, you've gone further on the path of entrepreneurship than 99.999% of people who call themselves "entrepreneurs" have. Take time to grieve, but also take time to see all that you have accomplished.
If you still feel depressed after a month or two, go talk to a professional therapist/psychiatrist. Sometimes we need a little external help.
I haven't started a company (yet!) and can't imagine what the OP is going through but reading this made me feel better :). I will definitely save this for future reference for when I do start (and more than likely fail) my first company. Thanks and cheers!
Reminder for people who are running startups and are in serious relationships: nothing should be a secret from your spouse/partner. Especially money.
Maybe they're supporting you so you can recycle every dollar of revenue back into the business. Maybe you're gambling your shared savings on the success of your venture. Maybe you've got a good financial position and your family will be safe no matter what.
It doesn't matter. Tell your spouse. Get their advice. You don't have to take it, but they are a valuable resource to you, someone you can trust to listen to you, keep your secrets and have a different perspective.
It should not come as a surprise to him/her that the shutdown is likely; the shock of "no, it's definitely over" should only be a small bump.
Then you can both live through it, and go on to the next thing you have to do.
THIS! I can't get behind oscarthegrouch who thought it was important to articulate the worst case scenarios in a case like this, because regardless the next steps are the same, but this advice is gold.
Dont get to this point and surprise your partner. She is as much your partner financially as your co-founder, treat her like that from day one.
This point cannot be stressed enough. If you hide stuff from your spouse about money, you're going down a real bad road. If your life at home is shaky, there is no way you are going to be able to lift a business successfully. The two cannot be siloed off from one another.
If your spouse / partner _doesn't_ want to have these conversations, you have larger problems. One signpost that my marriage was doomed was my wife's shock at the possibility the business might fail, and her refusal to discuss the possibility.
I've been there. I shut down my YC startup about 3 1/2 years ago. It was covered in the press more than my launch was! Shutting down was a huge weight off my mind - we weren't successful and nothing was going to make it so.
You raised money and have employees. Worry about the employees. Get them new jobs in great startups by actively going through your network and making sure they get new jobs that they'll love with teams they'll enjoy.
Dont' worry about the investors. They've lost money before. If you raised from non-professionals, then you may have to apologize. Mean it.
Tell your wife, obviously. You probably don't need to worry about money too much - now you can take a low-stress job at high pay and get back what you lost doing the startup.
If you can run a startup, you're employable as a consultant to at least enough people to make ends meet. Reach out to your personal networks and try and stem the tide a bit.
We've all been there at some point in our life, there's nothing shameful about working for others to make ends meet. And even though most of us hate the idea of working for other people, at some points in life you have to put your ego and pride aside and just bite the bullet and do some damn work to pay the bills.
Life is long, failure is temporary. You didn't crash an airplane with 300 people in it, you just didn't succeed at business, an extremely common occurrence. Just keep truckin'.
(I realize OP is not the anonymous poster in question)
> Reach out to your personal networks and try and stem the tide a bit.
I'm not in OP's position at all, but I'm wondering what you mean by this. Would you just call/email people you know and ask if they need help with their business?
There are all kinds of failed start-ups. As long as you know you didn't scam anyone and you can explain to your investors what happened and show accounting-books detailing how it all unfolded, and you learned something during this whole experience, you'll be alright in the long term. You can always try again. Maybe YCombinator(or GoogleVentures or whoever) should have a support-group for failed start-ups so people can share their experiences and know that they're not alone. Assuming you're in tech, investors know the gamble. I'm sure they know at least half the start-ups they invest in ultimately fail.
That said, one slightly harsh bit of advice:
>>But, I can’t imagine working for somebody else. I wish my wife understood that.
You need to get over that. Working for someone else(after a short break perhaps) is basically recharging your funds and your mind while you think about your next company. For all you know, you might run into your next co-founder in your new job. It's hard to think about the distant future when you're not even sure how to put food on the table tomorrow.
If you're in SF, LMK if you want a sounding board and someone to talk to in confidence. I'll buy you a beer. Help you get your head straight. [email protected]
I sympathize with most of this post, but the one thing that I don't get is this line:
"I can’t go much longer without a paycheck. But, I can’t imagine working for somebody else. I wish my wife understood that."
If the author really is as down and out as he claims to be, I think somebody offering him good money to get his life back on track might be something that is welcome. He can always work for himself once things straighten out.
I came here to make this comment. I completely sympathized (and still do) for his position - but the luxury of something like "Not working for someone else" is the first to go when you are in dire straits. If you have debt, a home, and people who count on you, you take whatever work you can find. I'd call up Chuck E. Cheese and see if I could get my first job back before I would decide to just fail on my responsibilities.
When your luck is down, the room for luxury is low. "Not working for someone else" is a ridiculously large one, and your wife is not in the wrong for thinking similarly.
Still, to be constructive: Consider work that can sustain your responsibilities, albeit at a non-optimal rate. You founded a startup, a task that requires endlessly marketable skills in a growing field. It ended, and perhaps it ended poorly - but you can, and will, endure.
I'm there right now (minus the high-profile accelerator and funded part so I had even less success). It sucks. I'm exhausted. But I'm broke so I need a job. I can hack stuff together but I'm more of a junior level dev so not sure how attractive I am to a Silicon Valley startup.
I thought I knew what it took to be successful, so I quit my wall street job and drove out to San Francisco to JFDI. I even lived in my car for nine months to save money. It would be worth it once the business took off. It never did. So I started another one, which failed too. When you work non-stop, every waking hour for almost two years and fail at everything, you realize you don't have it all figured out. At all.
The scary part of failing is asking yourself, what the heck do I do now? And you don't know the answer.
Probably should have made this a throwaway. Oh well.
It's not as bad as you think. You're alive. You have your health (hopefully). Tomorrow you'll most likely be alive and still have your health. This is the starting point.
Those that love you came along for the ride. If you tried as hard as you could, and you took this gamble with their blessing, you do not owe them an apology -- although it wouldn't hurt to give one. They'll still love you and you'll still be making decisions together.
Debt is bad, but they don't throw you in jail for being in debt, at least in the states. Do some studying on dealing with creditors. It's a game like any other game, and it helps if you know the rules. Plenty of folks in debt who are living happy and fulfilled lives. It's not the end of the world.
As to whether you'll be viewed as a failure or not, this depends on your peers and your culture. I suggest you hang out with people who view this as a badge of honor. Life sucks enough without having friends who stomp on you while you're down.
Family is another matter. Can't pick your family. But you can set some ground rules for interacting with them. If you need money from them, be prepared to do things you wouldn't normally do. After all, it's only fair to let them drive a bit if you're needing their help.
It's nothing but a thing. It can be hugely disasterous, or it can be a slight bump in the road. The difference is all between your ears, inside your head. You get to decide how to view this part of your life -- great adventure continues or yet another failure. I suggest you choose wisely.
Speaking from experience, failure is essential to becoming a good entrepreneur. I've heard we learn more from failure than any other learning technique. At no time are you more present in this life when you are failing, of that I can personally assure you.
I applaud your ability to share your failure with others, even in an anonymous way. Wherever you go and whatever positive choices you make next will guide you to the thing you were meant to do.
About 18 months ago I was laid off from an executive position at a company I'd been with about 5 years. At the same time, I was trying to bootstrap a business on the side, I'm the sole breadwinner in our household, three little kids, and I had a house that was underwater that we couldn't sell due in large part to all the foreclosures in the area that were the competition. To make it worse, we had moved to a very remote, rural area for family reasons, so had two houses to cover, and zero job possibilities anywhere in the area. Eighteen months later, that side project has folded (which I'm ok with), the other house is sold, and I'm doing well consulting (and with minimal travel). Will your story 18 months from now be rosy and happy? I don't know, but I suspect if you are the kind that would take the risk to start up a business, you are the kind that will hustle to do whatever it takes to first reach a point of survival and then the road back to thriving.
How you deal with the process and its fallout will be a defining moment for you as a person. Be upfront, be honest, and don't worry to much. Life goes on. You're in the best place and time there ever existed to fail and move on.
The best advice I can give you is that the sky will clear the moment you absolve yourself of the responsibilities. You'll be a free, earning man again. Things will only look up, and very quickly the ideas will start flowing again.
Take your wife for a talk. Explain to her how it's going to be, and that you'll be looking for a job the moment you've turned off the lights. You will have some peace, comfort and certainty soon that will allow you to think clearly, and later on, establish a learning process of everything you've gone through.
Someone around these parts said that the most difficult part of being an entrepreneur is managing your own psychology. It's time you get a hold on yours and own the situation.
Here's one of the most important lessons I've learned about startup life:
There is a fundamental difference between being poor and being broke.
Being broke implies you don't have enough cash or expected cash flow to cover your debt - but it doesn't mean you haven't accumulated wealth. Being poor means you neither have cash nor wealth. The OP is simply broke, but not poor.
Knowledge from failing a business is (IMHO) one of the greatest, if not the greatest, ways to accumulate intelligence in business. That is extremely valuable.
"Knowledge from failing a business is (IMHO) one of the greatest, if not the greatest, ways to accumulate intelligence in business. That is extremely valuable."
I think what you're going to find out is letting go will actually be a huge relief. You're going to bumble around feeling like a worthless piece of shit for a few weeks and then ideas will start boiling over in your mind. Before you know it you'll be writing a business plan or prototyping something new and you'll be armed with this failure as a roadmap of what not to do. You sir will be a-ok.
PS. Not having any money at least once in your life is something everyone should go through. You'll be surprised at how well you eat and live when you thought you'd be homeless. You'll also realize how much bullshit you have in your house or services you pay for that you really don't need. Good luck - you won't need it.
Completely agree. It's amazing what we don't need and I'll expect you find your confidence in 12 months is through the roof. The shackles you thought were binding you are were actually made of sand.
So all the very best, and remember this will be an awesome war story for you to tell in the future.
Like you, I raised money, went through a top accelerator and had a wild ride that doomed in failure.
It's ok to be terrified. It's ok to hurt. Fear paralyzes. You will pull your socks up and do what you need to do. It'll hurt more than you know. You'll quickly separate your real friends from the rest. And then something amazing will happen, your life will go on.
The first thing you'll notice is how much of life you've missed while riding the startup "high life". Big things like love, family, reality will suddenly become clearer and no longer dimmed by the tinnitus of whatever TechStars derivative you've been through.
The next is that you're a hell of a lot wiser. You'll find a job and you'll start performing. You'll look like a legend because the pace and agility you learned to work at during your startup days will make you a rockstar anywhere you decide to put your talents to use.
Your performance will bring more money, and power (to a degree) than you've ever made before. You'll make up for lost time.
And then, like all of us, you'll hear the siren song of entrepreneurship beckon you out into the world again. You'll pick up the pieces and start anew.
It is hard to be where you are. Thankfully life does move forward.
In my case we had a couple million invested in the world changing idea. Saying we failed was very very hard. Hard to tell my friends, our industry partners and my parents.
What I did - was take a long walk to my favorite rock on the lake. And I sat there in the cold and watched birds fly and fish eat and the sky change. I cried tears of frustration and of grief, for the possibilities that wouldn't be.
I then went back the office and made a list of things we needed to do. In my case our investors saw it coming because we'd missed key milestones for additional funding. Our team was small and I'd been open with them about missing the milestones.
We negotiated out of our contracts and made our final payments. In our case our board had made it clear we needed "wind down money" in the bank and we had it.
It wasn't easy, not by a long shot. At the end I was drained. I took two months off. I slept, I prayed, I read and I journaled. You may not be able to do all of that, but give yourself a break.
What I wished I had was someone to talk to who understood what I was going through. Plenty of people fail in business, but not many have a lot of money backing it, a lot of people believing in it and you feel like you let them down. Take up the offers of help to talk in person. I'd be glad to sit and listen if you want. The good news is that the sun will rise tomorrow and it will be a new day. And while it won't feel great, you will get through all of this.
[+] [-] tptacek|12 years ago|reply
* If your payables and debts are all in the company's name, nobody is coming for your house. The likelihood that your business was going to die before you could pay all your debts was priced into your contracts. If you have employees, pay them and get them off your books first; employee wages are, depending on the state you're in, the one likely exception to that rule.
* If they were in your name, well, that sucks, but still nobody is coming for your house. Your credit rating will probably absorb all the damage. I've had shitty credit all my life, so much so that it used to make it hard to get checking accounts (I'm not a deadbeat, I just don't have revolving credit, and do have billing disputes that I don't have time to resolve). Shitty credit is not that big of a deal. Just don't use credit.
* It sounds like your wife is right. The existence of startups isn't a guarantee that you'll never need to work for someone else again. The normal life cycle of a startup founder is, (1) work for someone else, (2) start company, (3) run company into ground, (4) goto 1. Think of it this way: had your company been successful, it almost certainly would have left you in a state where you'd be working for someone else for a couple years during your earnout. "Not working for someone else" was never really on the table.
* Getting a company funded and then running it is a resume plus. You won't have more trouble getting another job than you did getting the one you left to start this company.
* Your investors expected you to fail. The odds were always overwhelmingly that you would. The whole startup investment model is, put money into 10 companies, hope 1 succeeds. Your investors are professionals. Let their problems remain their problems.
* Are you going to get ridiculed for failing? Obviously, you're not an HN reader. You'd have gotten ridiculed for succeeding. Ridicule is the air we breathe. Why do you care?
* Most small companies start from nothing. That's good news, because "nothing" is an easy state to achieve. Give yourself a couple years, and then try again.
[+] [-] patio11|12 years ago|reply
With regards to your own situation: you're in the best hiring market in the history of ever. Reach out to your incubator's network and you'll have attractive job offers starting as early as you can accept them. That isn't the whole of the solution set: Big Daddy G and the rest of the tech industry are hiring like mad, too, and they are also throwing around signing bonuses large enough to cover your last few months of salary nonpayment.
P.S. to other HNers: "And then we didn't pay ourselves salary" strikes me as something I hear from a lot of failed funded startups which magnifies the personal financial risk of doing them significantly without meaningfully increasing the chance you'll pull things through. I'd strongly consider not doing that, again, unless the alternative is missing payroll for your other employees.
[+] [-] dctoedt|12 years ago|reply
[+] [-] ceph_|12 years ago|reply
Haha, so true. Failure is lauded; success is criticized and mocked mercilessly.
[+] [-] opendomain|12 years ago|reply
[+] [-] pmorici|12 years ago|reply
You realize that your credit record effects more than just your ability to get credit and other financial services right? Insurance companies will sometimes deny coverage based on information in your credit record. ie: health insurance.
[0] http://www.consumer.ftc.gov/articles/0152-how-credit-scores-...
[+] [-] sneak|12 years ago|reply
Wow, I'd never really thought about it that way before. You're completely right, of course.
It's just rather depressing. Maybe I'll go re-read Rework.
[+] [-] mathattack|12 years ago|reply
I like a lot of your posts - this is one of the best things you've written. Reminds me of Feynman. http://en.wikipedia.org/wiki/What_Do_You_Care_What_Other_Peo...
[+] [-] na85|12 years ago|reply
You know, some personality types cannot help but be concerned with how they're perceived by others. They're hardwired that way. It's the classic misunderstanding between extraverts and introverts.
[+] [-] dkersten|12 years ago|reply
[+] [-] danbmil99|12 years ago|reply
So true, it hurts.
[+] [-] piyush_soni|12 years ago|reply
[+] [-] ye|12 years ago|reply
[+] [-] 3327|12 years ago|reply
[+] [-] atmosx|12 years ago|reply
[+] [-] laureny|12 years ago|reply
She's understood it long enough to let you pursue the dream of your life at great costs for her, maybe now it's time for you to do some sacrifice for her and go work for someone?
You're not the first one to have to do that and, you know, survive.
Seriously.
[+] [-] tod222|12 years ago|reply
So did one of the commenters: [1]
Sorry it didn’t work out.
“I can’t go much longer without a paycheck. But, I can’t imagine working for somebody else. I wish my wife understood that.”
Change your perspective on this.
I’m a co-founder of a successful and growing business. I’ve got around $2M liquid and who knows what on paper. I’m decently rich headed for pretty damn rich. In the last week, I’ve changed light bulbs, picked up bugs with my hands (no tissue close, wanted to get it and call the bug guy before people saw it), swept the floors, took box trash out to the dumpster, cleaned some toilet stuff (will leave it there) and just generally served people on my team in any way I could. I find ways to do it because they are talented, could work anywhere and choose to work here. So I serve them. Also, I have deep relationships with them and I love them. I want to win with them.
From your words, I worry that you don’t understand the point of the game you are playing. If you want to run any successful team be it a business, a non-profit, a 5th grade little league ball club – you are servant in chief. Others exist in the world. You aren’t really ever by yourself or for yourself. Work on being and building a team. Make meaning and tie it to production. Start by being the best teammate you can be. Being an employee in an intense and well managed company is a good place to learn this skill.
To me the key point was this:
If you want to run any successful team…you are servant in chief.
Most managers completely miss the "servant in chief" bit.
[1] http://startupsanonymous.com/story/were-shutting-down-and-im...
[+] [-] MidsizeBlowfish|12 years ago|reply
[+] [-] avenger123|12 years ago|reply
Build the cash reserves, get back on a stable financial ground and go ahead and try again.
Sometimes the myopic tendencies of these stories really drives the point of how self-absorbed one can get with this. Working for someone else likely means a nice office, nice chair, nice desk, nice computer and monitors and the ability to sit down for 8-9 hours a day and use your mind and likely a decent salary.
I think for the vast majority of people in the workforce that do don't software development, that's not surviving but thriving.
[+] [-] GuiA|12 years ago|reply
As your post seems to indicate, you're scared shitless right now and it seems like the entire world is coming to an end. Trust me, even if it really seems that way, it's not.
For now, grit your teeth and go through the bad stuff. Tell your wife. Be honest with her. No matter what, she's your wife for a reason- she'll support you through all of this. If you neglected your relationship with her a bit because of the startup thing, then she comes first now. Then tell your investors. Tell your employees. Tell whoever else you need to tell. Be honest, genuine and straightforward. The next few weeks are going to suck big time, but you'll get through them.
Once the big stuff is behind you, take a few weeks to breathe, if possible financially. You're coming to the end of a long, arduous journey, and that's always something hard to process. Try to find joy in the little things that you didn't have the time for during your founder mode. Have brunch with your wife. Go take a walk alone in the forest. Read a book. Take time to recover.
You will find another job. You don't realize this right now, but having run a startup for 2 years gives you more skills and experience than others have developed in a lifetime. If you have to take a job right away because of financial hardships, take something low stress (consulting/freelance could be a good choice, for the flexibility, although it can be hard to get started with no leads). Now is probably a bad time to do another startup. Also, you probably want to use this as a lesson to remember that you should always have ~6 months of expenditures in the bank that you NEVER touch precisely for situations like this one.
Don't worry about the investors. It's part of their job - you're not the first startup that they funded that failed, and you're not the last either. Be professional with them- if you want to do a startup again in the future they will remember your honesty and ethics more than the fact that your startup failed.
You ran a startup for 2 years. Solely by doing that, you've gone further on the path of entrepreneurship than 99.999% of people who call themselves "entrepreneurs" have. Take time to grieve, but also take time to see all that you have accomplished.
If you still feel depressed after a month or two, go talk to a professional therapist/psychiatrist. Sometimes we need a little external help.
It's going to be OK. :)
[+] [-] jlebron2|12 years ago|reply
[+] [-] dsr_|12 years ago|reply
Maybe they're supporting you so you can recycle every dollar of revenue back into the business. Maybe you're gambling your shared savings on the success of your venture. Maybe you've got a good financial position and your family will be safe no matter what.
It doesn't matter. Tell your spouse. Get their advice. You don't have to take it, but they are a valuable resource to you, someone you can trust to listen to you, keep your secrets and have a different perspective.
It should not come as a surprise to him/her that the shutdown is likely; the shock of "no, it's definitely over" should only be a small bump.
Then you can both live through it, and go on to the next thing you have to do.
[+] [-] bksenior|12 years ago|reply
Dont get to this point and surprise your partner. She is as much your partner financially as your co-founder, treat her like that from day one.
[+] [-] johnjlocke|12 years ago|reply
[+] [-] chernevik|12 years ago|reply
If your spouse / partner _doesn't_ want to have these conversations, you have larger problems. One signpost that my marriage was doomed was my wife's shock at the possibility the business might fail, and her refusal to discuss the possibility.
[+] [-] pbiggar|12 years ago|reply
You raised money and have employees. Worry about the employees. Get them new jobs in great startups by actively going through your network and making sure they get new jobs that they'll love with teams they'll enjoy.
Dont' worry about the investors. They've lost money before. If you raised from non-professionals, then you may have to apologize. Mean it.
Tell your wife, obviously. You probably don't need to worry about money too much - now you can take a low-stress job at high pay and get back what you lost doing the startup.
Also, please feel free to reach out: [email protected]
[+] [-] dchuk|12 years ago|reply
We've all been there at some point in our life, there's nothing shameful about working for others to make ends meet. And even though most of us hate the idea of working for other people, at some points in life you have to put your ego and pride aside and just bite the bullet and do some damn work to pay the bills.
Life is long, failure is temporary. You didn't crash an airplane with 300 people in it, you just didn't succeed at business, an extremely common occurrence. Just keep truckin'.
(I realize OP is not the anonymous poster in question)
[+] [-] walden42|12 years ago|reply
I'm not in OP's position at all, but I'm wondering what you mean by this. Would you just call/email people you know and ask if they need help with their business?
[+] [-] smtddr|12 years ago|reply
That said, one slightly harsh bit of advice:
>>But, I can’t imagine working for somebody else. I wish my wife understood that.
You need to get over that. Working for someone else(after a short break perhaps) is basically recharging your funds and your mind while you think about your next company. For all you know, you might run into your next co-founder in your new job. It's hard to think about the distant future when you're not even sure how to put food on the table tomorrow.
[+] [-] eoghan|12 years ago|reply
[+] [-] mbesto|12 years ago|reply
[+] [-] stevanl|12 years ago|reply
[+] [-] rbanffy|12 years ago|reply
[+] [-] riddlemethat|12 years ago|reply
[+] [-] paultannenbaum|12 years ago|reply
"I can’t go much longer without a paycheck. But, I can’t imagine working for somebody else. I wish my wife understood that."
If the author really is as down and out as he claims to be, I think somebody offering him good money to get his life back on track might be something that is welcome. He can always work for himself once things straighten out.
[+] [-] piratebroadcast|12 years ago|reply
[+] [-] alxjrvs|12 years ago|reply
When your luck is down, the room for luxury is low. "Not working for someone else" is a ridiculously large one, and your wife is not in the wrong for thinking similarly.
Still, to be constructive: Consider work that can sustain your responsibilities, albeit at a non-optimal rate. You founded a startup, a task that requires endlessly marketable skills in a growing field. It ended, and perhaps it ended poorly - but you can, and will, endure.
[+] [-] panther2k|12 years ago|reply
I thought I knew what it took to be successful, so I quit my wall street job and drove out to San Francisco to JFDI. I even lived in my car for nine months to save money. It would be worth it once the business took off. It never did. So I started another one, which failed too. When you work non-stop, every waking hour for almost two years and fail at everything, you realize you don't have it all figured out. At all.
The scary part of failing is asking yourself, what the heck do I do now? And you don't know the answer.
Probably should have made this a throwaway. Oh well.
[+] [-] yuhong|12 years ago|reply
I prefer that the problems be fixed properly if possible.
[+] [-] DanielBMarkham|12 years ago|reply
Those that love you came along for the ride. If you tried as hard as you could, and you took this gamble with their blessing, you do not owe them an apology -- although it wouldn't hurt to give one. They'll still love you and you'll still be making decisions together.
Debt is bad, but they don't throw you in jail for being in debt, at least in the states. Do some studying on dealing with creditors. It's a game like any other game, and it helps if you know the rules. Plenty of folks in debt who are living happy and fulfilled lives. It's not the end of the world.
As to whether you'll be viewed as a failure or not, this depends on your peers and your culture. I suggest you hang out with people who view this as a badge of honor. Life sucks enough without having friends who stomp on you while you're down.
Family is another matter. Can't pick your family. But you can set some ground rules for interacting with them. If you need money from them, be prepared to do things you wouldn't normally do. After all, it's only fair to let them drive a bit if you're needing their help.
It's nothing but a thing. It can be hugely disasterous, or it can be a slight bump in the road. The difference is all between your ears, inside your head. You get to decide how to view this part of your life -- great adventure continues or yet another failure. I suggest you choose wisely.
[+] [-] kordless|12 years ago|reply
I applaud your ability to share your failure with others, even in an anonymous way. Wherever you go and whatever positive choices you make next will guide you to the thing you were meant to do.
[+] [-] shmerl|12 years ago|reply
In such circumstances one might need to do what's required, and not what one would like to. I hope his wife will explain that to him.
[+] [-] poulsbohemian|12 years ago|reply
[+] [-] flyinglizard|12 years ago|reply
The best advice I can give you is that the sky will clear the moment you absolve yourself of the responsibilities. You'll be a free, earning man again. Things will only look up, and very quickly the ideas will start flowing again.
Take your wife for a talk. Explain to her how it's going to be, and that you'll be looking for a job the moment you've turned off the lights. You will have some peace, comfort and certainty soon that will allow you to think clearly, and later on, establish a learning process of everything you've gone through.
Someone around these parts said that the most difficult part of being an entrepreneur is managing your own psychology. It's time you get a hold on yours and own the situation.
Good luck!
[+] [-] mbesto|12 years ago|reply
There is a fundamental difference between being poor and being broke.
Being broke implies you don't have enough cash or expected cash flow to cover your debt - but it doesn't mean you haven't accumulated wealth. Being poor means you neither have cash nor wealth. The OP is simply broke, but not poor.
Knowledge from failing a business is (IMHO) one of the greatest, if not the greatest, ways to accumulate intelligence in business. That is extremely valuable.
[+] [-] sayemm|12 years ago|reply
Amen.
[+] [-] aaronpeck|12 years ago|reply
PS. Not having any money at least once in your life is something everyone should go through. You'll be surprised at how well you eat and live when you thought you'd be homeless. You'll also realize how much bullshit you have in your house or services you pay for that you really don't need. Good luck - you won't need it.
[+] [-] apapli|12 years ago|reply
So all the very best, and remember this will be an awesome war story for you to tell in the future.
[+] [-] hidingmyname|12 years ago|reply
Like you, I raised money, went through a top accelerator and had a wild ride that doomed in failure.
It's ok to be terrified. It's ok to hurt. Fear paralyzes. You will pull your socks up and do what you need to do. It'll hurt more than you know. You'll quickly separate your real friends from the rest. And then something amazing will happen, your life will go on.
The first thing you'll notice is how much of life you've missed while riding the startup "high life". Big things like love, family, reality will suddenly become clearer and no longer dimmed by the tinnitus of whatever TechStars derivative you've been through.
The next is that you're a hell of a lot wiser. You'll find a job and you'll start performing. You'll look like a legend because the pace and agility you learned to work at during your startup days will make you a rockstar anywhere you decide to put your talents to use.
Your performance will bring more money, and power (to a degree) than you've ever made before. You'll make up for lost time.
And then, like all of us, you'll hear the siren song of entrepreneurship beckon you out into the world again. You'll pick up the pieces and start anew.
Ride the wave, brother/sister. Godspeed.
[+] [-] gavinbaker|12 years ago|reply
In my case we had a couple million invested in the world changing idea. Saying we failed was very very hard. Hard to tell my friends, our industry partners and my parents.
What I did - was take a long walk to my favorite rock on the lake. And I sat there in the cold and watched birds fly and fish eat and the sky change. I cried tears of frustration and of grief, for the possibilities that wouldn't be.
I then went back the office and made a list of things we needed to do. In my case our investors saw it coming because we'd missed key milestones for additional funding. Our team was small and I'd been open with them about missing the milestones.
We negotiated out of our contracts and made our final payments. In our case our board had made it clear we needed "wind down money" in the bank and we had it.
It wasn't easy, not by a long shot. At the end I was drained. I took two months off. I slept, I prayed, I read and I journaled. You may not be able to do all of that, but give yourself a break.
What I wished I had was someone to talk to who understood what I was going through. Plenty of people fail in business, but not many have a lot of money backing it, a lot of people believing in it and you feel like you let them down. Take up the offers of help to talk in person. I'd be glad to sit and listen if you want. The good news is that the sun will rise tomorrow and it will be a new day. And while it won't feel great, you will get through all of this.