Running a self-funded company is far from glamorous. This entrepreneur shares some of the biggest lessons she has learned and how she pushed through when the times get tough.
BY JACLYN JOHNSON
We’re living in the era of VC-backed everything. These days, it can feel like every new startup is raising seven figures, or working toward a seed, A, B, or C round. To make a cheesy analogy, investors are the new black, and everyone is getting in on the million-dollar action and billion-dollar evaluations.
As a business owner, I can tell you that those million-dollar investments aren’t the norm. For most of us (82%, according to a 2012 Global Entrepreneurship Report), that money comes from our family and friends, or out of our own pockets. And while some entrepreneurs might have access to million-dollar funding outside of venture capital, the majority of us don’t fit into that bucket.
I’ve started two self-funded companies–one of which was eventually acquired–and one of the things I realized is that we don’t often get the notoriety of venture-backed companies. As a result, it’s easy to feel alone–even though we’re technically the majority. In my entrepreneurial journey, I’ve learned a few lessons that kept me sane during the uncertain (and lonely) times that come with starting something from scratch.
1) I EMBRACED GETTING MY HANDS DIRTY When you’re a founder of a self-funded business (and your business is running on a not-so-large budget) you need to be an operator–at least at the beginning. It’s usually not wise to hire a large executive team and throw money at every problem. At various points, I’ve been the HR, finance, account manager, the coffee maker, and the deal-closer.
Of course, when my company got to a point when we had the necessary momentum (and I needed to focus on scaling and growing the business rather than on entry-level, time consuming tasks), I started hiring. But I waited until my business saw more money coming in than what it was bleeding out. After all, I didn’t have the luxury of relying on a third-party for cash injection–it was all up to me to bring money to the company.
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2) I HIRED EMPLOYEES WHO WERE ENTREPRENEURIALLY MINDED I discovered early on just how much of a roller-coaster starting a business can be. This means that you need to have a team around you to lean on. But you can’t have just anyone. You need to identify what kind of roles you need to fill to move your business forward, and be brutally honest about the kind of individuals who can fill those spots. Often, this requires you to look beyond pedigree and resumes.