In the first of a new series charting a tech start-up’s progress into unfamiliar business waters, Richard Leyland tries to comes to terms with his trepidation at spending investors’ money.
I’m scared of our investors. Only a little bit you understand – but it’s as clear as the sweat on my brow. They frighten me.
In late 2009, I set up a company in London, based on an iPhone app and a website. We’ve done well since then, having grown our user base, built a team and closed an investment round a few months ago.
We gave a chunk of the company to some investors, who in return are giving us a lump of money, time and expertise. Now we’re seeing what damage we can do when we’re not worrying about our ability to pay a bus fare.
We meet the investors every month and pore over key performance indicators and management reports. Individually, the investors are not frightening, and indeed the numbers we show them are looking great, but it’s frightening nonetheless. The fear comes from the formality, the rigour, the other people’s moneyness of it all.
I’m struck with the fear on a pretty regular basis these days. It seems to be an integral part of what my friend Steve O’Hear calls startuplife. Some things that have made the blood pump faster in recent months include:
- The investor event I attended, where I pitched in seven minutes – not six, nor eight – to a group of 100 angel investors. The fear rose to a climax after watching a succession of highly technical and revenue-led presentations, knowing that I had a few shiny pictures on PowerPoint and a pitch heavy on enthusiasm, but little else.
- The press briefing I attempted in Paris, to French journalists, in French. I had fatally over-estimated mon français, and had to apologise after two minutes and revert to English, asking the friendly PR guy to translate in real time.
- Buying stuff. When we closed our investment round, the company had a single physical asset: a BlackBerry – which frankly I hadn’t wanted in the first place. Since then, as we’ve grown we’ve bought office furniture, an iPad, a coffee machine, a printer and a dozen other must-haves. I seem to buy each object three times. First, when I pay, secondly when I hand the receipt on to our accountants and thirdly when I see it again on the profit-and-loss statement in the board meeting. I have spending fear.
When I worked for other companies I rarely felt fear. I did stuff that I knew I could do, took the money and fought the weekly Sunday blues. It didn’t feel easy at the time, but it looks that way two years later.
But a bit of fear is a good thing, right? Of course that’s true. Ambition founded the company, bravado drove it forward and fear makes sure I prepare properly for the big occasions. It’s my antidote to complacency.
There’s also much more to the story. We’ve had light and shade, triumph and disaster, our Apple iPad and HP TouchPad moments. That’s the stuff of start-up cliché and exactly what I expected. It’s great fun too. Something about being all-in gives our triumphs an extra, adrenaline-fuelled edge, and I rather suspect I’m addicted to that now.
Really, though, it’s the bursts of fear that took me by surprise. Now if you’ll excuse me, I only have two weeks until I next face the board and I’m sure there’s something I should be doing.
Richard Leyland is an entrepreneur and writer, focused on the future of work. He founded WorkSnug, a location-based service for mobile workers, in 2009.