Not everyone is going to like your idea, but don’t be a jerk. In the entrepreneurial world, only a fool burns bridges. [This originally ran at INC.com here.]
At the heart of our accelerator program lies a pure capitalist-driven investment vehicle.
You see, we take money from investors and reallocate it to 10 to 14 companies per year as a seed investment. We then wrap a three-month mentorship program around that investment. This program hopefully facilitates great company growth and thus increases our chances of a return.
In addition to our investment/mentoring role, we also serve as a community catalyst, developing and participating in many events that engage in the local, regional, and national start-up scene. Startup Weekend, university pitch competitions, an open-office-hours block, and our own reverse job fair, Tech Jobs Under the Big Top, are just a few of the ways we get to meet entrepreneurs, lots of entrepreneurs.
Commensurate with this many investments and all of these events is the opportunity to sit and discuss and sometimes advise founders on their ideas. It is a tricky proposition to honestly and openly question various aspects of the vision. And, I have to share that I am getting bolder and more honest about my views. To set this up, I always ask what they want from me. If they want advice–here it comes.
This week we let 150-plus founding teams know that they would not be accepted into our program. Some of the teams we have gotten to know over the past months, and to fulfill my half of our relationship, I offered to sit down and explain our thoughts.
I saw three reactions:
- Sincere thanks and what can we do better? These are the all-stars. They realize that this is just one path for them, and not their path right now. They then start to ask questions about the business or their team or their strategy. I love it. They are using the opportunity to learn about one investor’s viewpoint. Lastly, they are giving me a reason to stay connected going forward. Because you never know how things will play out.
- Quiet and reserved disappointment. They are looking a little deer-in-the-headlights. I go on to outline two or three things I think they ought to concentrate on, but I am not sure it is sinking in. I hope they realize the Startup Factory was just one option for them, and that if they had put all their eggs in this one basket maybe they are not very good entrepreneurs.
- Let me tell you why you are wrong. Really? As part of my talk track I almost always share that I hope we are wrong and I will gladly applaud them if they are successful outside of our investment. What I get back is someone trying to sell me on why the two or three reasons I provided are wrong or misguided. I have had founders argue that my decision would come back to haunt me. Someone told me, “If this is how you evaluate investments, you are sure to fail.”
Don’t get me wrong–I may not be the best investor and I may also be haunted, but I am an active investor. In fact, through our accelerator fund, we may be the most active investor in the southeast. Most important, the startup journey twists and turns and you never know where or when you might engage with me or my current fund or my new fund or my new partner.
With that knowledge, do you really want to burn this bridge?
When you have very little humility it is quite easy to burn bridges. However, humility gets learned pretty quickly when things do not go your way. Having been on the side of receiving the “not quite the idea we’re looking for” message, it was more important for us to not rationalize why “they were wrong” but how we could better prepare ourselves for a potential next meeting.