The market will always test your resolve

by Steli Efti

We had just completed Y Combinator and were flying high during Demo Day.

Investors lined up in front of our proverbial door, eager to invest in Swipegood, the name of our startup at the time.

I was in charge of raising money and extremely full of myself—I felt like the biggest, baddest startup hotshot in town. I had my fair share of failed fundraising attempts with prior startups so this time I wanted to do it right.

Being a badass

I drafted an email to all these ardent VCs, basically saying: "We want to close this round of funding within the next 3 weeks, and the evaluation will be in the following range ... If you can work within these terms, we're happy to speak with you."

The gist of it was: here's what we want, take it or leave it.

I re-read the email one more time with a big bold smile on my face, mouse cursor hovering over the "Send" button.

"Yes, this is how it's done, Steli," I told myself, "you're a real badass." 

Click.

My email was now in the inboxes of some of the most important tech investors of Silicon Valley, many of whom I admired. Each had expressed interest in funding us. This was a once in a lifetime opportunity, and I had made a really big, bold bet. 

Being a little b*tch (metaphorically speaking)

I felt awesome ...until I read the first response: "I'll pass. Good luck, guys!"

A couple of minutes later, another investor wrote: "The terms don't work for me, but keep me in the loop. Maybe we can work together someday in the future."

And another email: "I like what you guys are doing, but I just can't make it happen with these terms. Let's keep in touch though!"

The rejections continued flooding my inbox, one after another. I counted 1 rejection ... 2 rejections ... 3 ... 4 ... 5 ... this was not going well. :(

My confidence was evaporating quickly. Anxiety took its place.

"Oh, shit. I've completely screwed this up," I thought to myself, picturing a particular VC opening my email and wondering, “What does this punk kid think he's doing?!” I imagined that maybe he had forwarded it to his pals and they had all laughed about Steli from Swipegood ...

Panic caused my stomach to turn, and my mind raced frantically.

Should I backtrack? Could I salvage this situation in any way?

When in doubt, PANIC!

I considered sending another email to the investors who hadn't responded yet. I would tell them something along the lines of: "Because we really want to work with YOU in particular, we'd be open to terms other than those outlined in the previous email and open to doing things your way."

I had almost started typing when the still-functioning part of my brain interfered.

"Don't blink, Steli," it told myself.

"When you panic, you come up with really stupid ideas. Don't act on them. Take a couple of deep breaths. Come to your senses before you decide what to do next."

That is exactly what I did. It was nerve-wracking, but I decided to wait and see how it would play out.

Take a deep breath and wait

This is the hardest part about hustling: managing your own emotions, keeping your cool in the storm, and standing your ground in the face of your own fears and anxieties. It's what prevents most entrepreneurs from taking the risks that would lead to their biggest wins.

When you go out into the world and do bold things, the universe will test your resolve. Don't blink. Look right back at it, and pretend to be confident. 

Sometimes you'll be rewarded handsomely. In our case, we did get a couple of positive responses and ended up raising an awesome round on great terms within our desired timeframe. (Of course, as soon as I received my first positive response to my bold email, I reverted to my state of self-assurance, telling myself, "See, I knew all along that this would work!")

Whether you're fundraising, increasing your prices, or being bold when stakes are high, it's best to stand your ground.


 

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