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The Value of Actually Getting Paid
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The 9 Best Growth Agencies for Startups
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How to Recruit a Rockstar Advisor
Why Having Zero Experience is a Huge Asset
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The Hidden Treasure of Failed Startups
If It Makes Money, It Makes Sense
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The Ridiculous Spectrum of Investor Feedback
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Series A, B, C, D, and E Funding: How It Works
Best Pitch Decks Ever: The Most Successful Fundraising Pitches You Need to Know
When to Raise Funds
Why Aren't Investors Responding to Me?
Should I Regret Not Raising Capital?
Unemployment Cases — Why I LOOOOOVE To Win Them So Much.
How Much to Pay Yourself
Heat-Seeking Missile: WePay’s Journey to Product-Market Fit — Interview with Rich Aberman, Co-Founder of Wepay
The R&D technique for startups: Rip off & Duplicate
Why Some Startups Win.
Chapter #1: First Steps To Validate Your Business Idea
Product Users, Not Ideas, Will Determine Your Startup’s Fate
Drop Your Free Tier
Your Advisors Are Probably Wrong
Growth Isn't Always Good
How to Shut Down Gracefully
How Does My Startup Get Acquired?
Can Entrepreneurship Be Taught?
How to Pick the Wrong Co-Founder
Staying Small While Going Big
Investors are NOT on Our Side of the Table
Who am I Really Competing Against?
Why Can't Founders Replace Themselves?
Actually, We Have Plenty of Time
Quitting vs Letting Go
How Startups Actually Get Bought
What if I'm Building the Wrong Product?
Are Founders Driven by Fear or Greed?
Why I'm Either Working or Feeling Guilty
Startup Financial Assumptions
Why Every Kid Should be a Startup Founder
We Only Have to be Right Once
If a Startup Sinks, Founders Go Down With it
Founder Success: We Need a Strict Definition of Personal Success
Is Quiet Quitting a Problem at Startup Companies?
Founder Exits are Hard Work and Good Fortune, Not "Good Luck"
Finalizing Startup Projections
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Our Startup Culture of Entitlement
The Bullshit Case for Raising Capital
How do We Manage Our Founder Flaws?
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All Founders Make Bad Decisions — and That's OK
Startup Board Negotiations: How do I tell the board I need a new deal?
Founder Sacrifice — At What Point Have I Gone Too Far?
Youth Entrepreneurship: Can Middle Schoolers be Founders?
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Why Do VC Funded Startups Love "Fake Growth?"
How Should I Share My Wealth with Family?
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Why Do We Still Have Full-Time Employees?
The Case Against Full Transparency
Should I Feel Guilty for Failing?
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Founder Impostor Syndrome Never Goes Away

Being Leveraged Means Having Zero Choices

Wil Schroter

Being Leveraged Means Having Zero Choices

I grew up with zero choices. As a broke kid with a single mom, I never really understood what people were talking about when they said they could "choose" how life worked for them. I just got used to being stuck with zero choices and dealing with the outcomes.

"Oh, you want to pay me 'ones of dollars' to mow your lawn? OK! I guess that’s what I have to do, because I need money."

Later on in life, I got to live this all over again as a broke startup Founder. No one presented me with an abundance of choices, I just took what I could get because I was constantly leveraged. Unfortunately, that runs a bit counter to the popular narrative we're hearing in startup culture, where we somehow have all the choices in the world and we're simply not making the best choices.

I'm calling bullshit on this. 99% of the startup Founders I know are totally leveraged and have very few if any of these choices in the real world. We take what we can get, when we can get it, and guess what? It's not awesome.

Choosing Investors

We're constantly told that we need to "choose the right investors" for our startup, as if we're the lead contestant in a Bachelor-style reality show and all we have to do is give the "funding rose" to the right suitor. Meanwhile, we're looking at our inbox with exactly zero responses from a single investor.

When we have no one knocking, we don't "choose" jack shit. We take what we can get from anyone that's willing to write a check. That's our reality.

The only way for us to change that leverage is to get more investors competing for our deal, but for most Founders that's a very tall order. There are typically a small number of deals that are truly competitive, but for everyone else, the beggars can't be choosers.

Choosing a Co-Founder

Picking our co-Founder will likely be the single most important decision we make early in our startups life (or not picking one, which is also an option). We can read even more advice on how important it is to get the right co-Founder but that also assumes we have all kinds of choices.

Right now we've got an idea in our head and there's exactly one person that thinks it's good enough to partner with us. There it is. We get that one person. It's 2 a.m. at the bar ("Closing time..") and there's one person still there. That's our partner. To torture that scenario further, we're not just taking that person home, we're marrying them and giving them half of everything we have (equity).

If this sounds familiar it's because at the time we don't realize the gravity of the decision we're making, and how leveraged we are when we're making it. Think about it this way - when is the last time we had zero choices which lead to our best decision?

Should we punt this decision until later? Probably. But the reality is we're kinda stuck with what we have if this is the moment we're going to make this decision.

Choosing Better Life Balance

If we're going to talk about all these choices we're supposedly allowed to make, we'd be remiss in not mentioning this whole "work-life balance" that everyone keeps raving about. The thinking goes that we're supposed to close our laptop, forget about work for a while, and go enjoy life.

Hmm. Let's think about that. We're completely broke personally, we've got a few months of runway in the bank for our startup, and every relationship in our life is strained because of this venture. What version of that leads to "Let's take a relaxing walk in nature?"

It doesn't. Yes, it's absolutely a choice as to whether we want to create a better work-life balance, and of course, we should "choose" to do that. But we don't. Why? Because when we're stressed AF the last thing on our minds is doing anything that doesn't have to do with making that stress go away, which in our case, usually means working nonstop.

Now, none of these choices are fun, and most of our options suck. But that's the real reality for most startup Founders. So if you're reading this, and you're one of 99% of us who are feeling this way, take heart in knowing you're not alone. We're all in this.

In Case You Missed It

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Alexandra Kapelos-Peters

100% accurate. Wil is reading my mind and writing my thoughts.

Reply2 years ago

JC Herz

One thing that works for me - and I realize the second half of this isn't on the menu for everyone - is a two-part recipe: 1) Make the best moves you can make on the board all day, and 2) Trust God. I don't know if this necessarily boosts success, but it does bring a calm sense of purpose to the day, and an ability to start each day relatively fresh. There are definitely days where it feels like the best moves on the board are in those last lines up at the top of a Tetris game, with new obstacles raining down. But even on those days, thinking of it as a game board does create a helpful amount of psychological distance. You play the hand you're dealt. It's a bad hand and you still win, there are experienced players who can recognize what it took to achieve that. And if you lose, you made the best moves on the board that you could, and the next step is to find the best insight from the wisest people about what moves were great and what moves, given what you knew at the time, could've been better and how. So if you want to play the game again, you can play it better (hopefully with a better hand). Or: you can choose to play a different game.

What's BS and unhelpful, as Wil points out, is talking to every athlete like they have the options of a heavily recruited star. Because most people aren't that draft pick, for all kinds of reasons that may not correlate to their ability or potential. But everyone has to run their race, take their shots, be grateful for the good breaks and be accept that things are going to go sideways a lot.

As for the second part - it's a massive benefit for a person to have faith that they are where they're meant to be, and that even if it's incredibly uncomfortable, what's happening now unlocks what's important that comes next. It might be a relationship - the battle buddy who is the silver lining of an otherwise disastrous endeavor - or an insight that 97% of what you were doing wasn't valuable, but that other 3% is an uncut diamond. You can achieve this without capital-F faith. But if you're so stressed out that perspective is almost impossible, that's less likely.

For what it's worth,

JC

Greg Elgort

Thanks Wil. Startup culture isn't for everyone, and it shouldn't be. It's easy to think that everyone is raising tons of money or that that founders that pay for press releases are successful. Some of the most successful people I know are crammed into small WeWork offices and are attached to their phones and laptops during their one day vacations.

Andrew Crefeld

Yes, continually refreshing stuff Wil. I was unleveraged for a brief time after selling my startup (not a big amount but enough to take a breath), but an opportunity came up and I was quickly leveraged again. I realized during my un-leveraged moment that I was just spending money, and I felt I needed to re-invest or it was just going to trickle away and I'd have nothing to show for it. So that is why we leverage, but I love how you help us understand it's normal, no matter how much we have or don't have.

Damon Rand

This should be talked about much more openly that it is. There is a whole industry that speaks to startups that have already "made it", but usually does so in a way that seems to include startups that haven't "made it" yet -- which is pretty demoralising for founders in those startups who experience a very different reality.

Rick Richman

Wow. So true.

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