Could This Be A Start-Up Reckoning?

Not too long ago, around February, if a founder pitched to enough investors they could most likely find someone to write them a check. A start-up could be pre-revenue with projections that, well…projected, a decent potential future for the business. If there was a market size that was compelling enough, someone somewhere would give them money. Start-ups were everywhere.

And like new start-ups popping up everywhere, funds too were exploding. To me, it felt like a new fund started every day. There was enough money to go around.

Then COVID happened…

Much has changed, the economy has changed, investors are changing the way they invest and start-ups are scared. Rightfully so, this is a scary time on so many levels.

Many people are without a job and start to explore that start-up idea they’ve had but never got around to. Currently, the start-up world is crowded with new startups in the idea phase.

Investors are more cautious about the checks that they write and I’ve noticed that some funds are starting to make an initial investment in companies at later stages than they have in the past.

Now back to my original question, could this be a start-up reckoning?

Is this the moment where truly only the strong founders survive?

Honestly, I wish I knew the answer to this. I wish I had a crystal ball that could tell me how the economy is going to do after we are on the other side of this pandemic. But my gut tells me, yes, only the strong, smart, and savvy founders will survive. But hasn’t that really always been the case? It would just take longer for the strong founders and companies to emerge from the fallout of the failing companies vying for the same money.

If you are a founder that is strong, smart and savvy not all hope is lost. Investors are still investing, if you have a business that is COVID proof or relevant to COVID you have a decent chance at investors taking notice. But you have to be a strong founder.

Investors invest in founders just as much as the company in earlier stages. Why? Because you can take an amazing company with a so/so founder and the company has a better chance of failing than being successful, but a rockstar founder can take a so/so company and make it thrive.

I say all of this not to depress founders, but it’s a soul searching time. If you know you are a rockstar founder, keep going, don’t lose hope. Make sure that your rockstarness shines through. Ask for help and support to make your vision a reality.

If you aren’t sure that you are a rockstar, you too should ask for help. Maybe you are the brains behind the business idea, it doesn’t mean you have to be the CEO if that’s not what you are good at. Find a co-founder or if you can afford it, hire someone to be the CEO. Investors will like that you can admit you aren’t the person to be the face, it shows honesty and realness.

But if you feel like you are on the struggle bus, this has always been so hard and there's no fun in it for you. Maybe this is the time of reckoning. Not everyone is an entrepreneur and that is okay. There is nothing wrong with it not being your journey. I’m sure that you learned a lot about yourself during this time. But it might be time to move on. Leave space and the investor money for companies that are passionate and that are going to change the world.

Perhaps this is a time of reckoning for entrepreneurs everywhere to slow down (yes, I said it, slow down) and take stock of life. What’s next for you and your business? Will you be the strong founder that survives?