Tag Archives: thefunded.com

Is Work Life Balance in a Startup A Good Thing?

What do you think about this (quoting a discussion at thefunded.com):

I Don’t Believe in Work Life Balance as a Startup Person. Am I Wrong?

In the discussion on thefunded.com, the person who asks the question is co-founder and CEO of a startup, and is working 60 hours a week. But there are problems: 

I wish we all would work like there’s no tomorrow, at least until we reach certain status where we can be confident that we have reached product market fit… However my co-founders have their families and they have to go home when work hours end … I am very dissatisfied because I feel like we can do much more if we tried harder.

If you get into that discussion, you’ll see that the startup community there is divided. There is no consensus.

Just yesterday blogging guru Chris Brogan posted an eloquent argument for balance in his Pay Yourself First:

But when you wonder how I’m getting as successful as I am, oddly, it’s because I’m doing the opposite of what you’d suspect. I’m working fewer hours now than I used to work last year. The trick of it all is that I’m working the right hours, and I’m managing my time and demands on my time much better.

This question keeps coming up. I jumped on a similar discussion a couple of years ago, when I posted Is Startup Life Life, which followed a public debate about work/life balance triggered by this zinger from Jason Calcanis in his How to Save Money Running a Startup

Fire people who are not workaholics. Come on folks, this is startup life, it’s not a game. Don’t work at a startup if you’re not into it. Go work at the post office or Starbucks if you want balance in your life.

Me? I’m not sure.  I hope for that happy medium, the gray area that isn’t either black or white; a startup that people believe in enough to work like mad, but one that gives them meaningful work to do, and one that hopes they manage to preserve a life as well. As if that were possible.

Angel Funding Waiting for the World to Change

Ever since I started in high tech in 1979, angel investment has been an amorphous, thoroughly disorganized, ad-hoc phenomenon that occurred somewhere between friends and family, on one end of a scale, and with venture capital, on the other. It was hard to find and hard to describe. People were selling lists of angel investors to entrepreneurs who were looking for investment.

I can’t say that the system worked; actually, I can’t even call it a system. Angel investment just happened. Securities law severely restricts the process of looking for investors, and, furthermore, also limits who is legally allowed to invest. An accredited investor has to meet minimum wealth requirements.

Last week I had a chance to talk at length with David Rose, founder of angelsoft.net. He  guest posted on this blog last Spring. Meanwhile, I’m getting more involved in my local angel investor group (Willamette Angel Conference), and using angelsoft.net software more. And David told me he’s continuing to bring angel groups together, and organize. So I’m hopeful about that.

The long-term dream is a smoothly working market bringing startups together with investors who understand the risks, have money, and want to invest it.

There are at least these three problems to solve:

  1. Organizing the information into a market-like system. Angelsoft.net is making real progress. Startups get an orderly application process, angel investors and groups of investors get better deal flow, and there’s more information for both sides. Also thefunded.com continues to add to its database of founder reviews of investors. Not to mention how much more information about angel investors is now available easily through simple Web searchs.
  2. Legal restrictions. And here I’m not sure how long it will take, or even if a solution is necessarily a good thing. It’s not simple. Restrictions on soliciting investors and qualification hoops for investors were made law back during the Great Depression because people were getting swindled. The law regarding information is way behind technology. The assumption that wealth is equal to sophistication in startup investment is questionable.
  3. Processing investment opportunities. I’ve been meaning to post for three months now about Revolutionizing Angel Funding on The Emergent Fool. That post, by Kevin Dick, talks about setting up a system to process startup deals automatically, using an online screening process. I’ll be watching that one. I’m not convinced that the way angel investors process deals, one by one, case by case, is really a significant problem. But it’s an interesting idea.

Overall, I’m intrigued by how much organization has happened in the last year or two.

I do believe there’s an opportunity for healthy disruption in this marketplace. It may be something like what kiva.org is doing for microlending, or what prosper.com was doing for peer-to-peer lending before (gulp) it got a cease and desist order from the Securities and Exchange Commision (SEC). On one side, a lot of people who know what they’re doing would like to invest in some selected startups. On the other hand, a lot of startups would like to work with investors.

The toughest part of all this is securities law. A lot of what might really make a huge difference in organization of angel investment is on the brink of breaking laws governing fishing for investors. I’m waiting, cautiously optimistic, to see how this develops. And how long it takes.

New Entrepreneurial Seal of Approval

Adeo Ressi doesn’t like what he calls a slanted field on the deals entrepreneurs get from investors. He says (I’m quoting):

Honestly, I think that the entrepreneur gets a raw deal today, and that this has gotten a lot worse since I started in 1994. Entrepreneurs are victims of a lot of predatory and exploitative behavior.

This has been bad for a while, but it’s gotten much worse. And it hurts the country, and the economy. We need to fix the availability of capital for entrepreneurs.

That led to The Funded Founder Institute, a four-month, $450 program to run selected entrepreneurs (including, by the way, wanna-be entrepreneurs) through weekly sessions with mentors and experts, ending with a certification that should smooth the path to investment. Microsoft BizSpark scholarships are available too, to pay the $450.

Adeo is serious about smoothing the path for founders. He says:

If we could eliminate all the headaches that the modern bureaucratic layering adds to start a company, and allow these founders to focus on the core business challenge, the likelihood of success increases dramatically. We want them learning how to do it right.

A brief interruption before I go on: this looks like a really good program to me, even though it’s brand new, and not certified formally by anybody else. Adeo has a good reputation, knows a lot of the right people, and he’s done some important things before. I think the certification he’s offering is likely to be very valuable. So if you’re interested apply now. Applications close for the first session, which starts this month, May 9. The application costs $50.

Look at some of the mentors already on board. Several are major Web names, founders or CEOs of Scribd, Mahalo, Socialtext, and so on. And Adeo told me has many more, including other mentors as well known as some of these, in the wings.

Adeo himself gives this program a lot of credibility. He’s the founder and main force behind TheFunded.com, a site I’ve posted about before, entrepreneurs reviewing investors. He got his skeptical view of investors the hard way, building companies. Game Trusts, one of his more recent efforts, won $15 million in venture capital and exited with acquisition by Real Networks.

He’s serious about leveling the playing field. The institute has posted sample startup documents including suggested deal terms more favorable to entrepreneurs than most. And the institute is offering to arbitrate disputes.

It’s also taking a piece of the action, which it’s hoping to reinvest in the long-term health of the program. Adeo says there will be warrants, linked to equity, as a “vehicle of valuable attribution.” That’s for “value as a sign to the mentors and the founders. And 60% of the warrant value goes right back to the participants. The remaining 40% is held by the institute as a value play.”