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It’s Not Your Fault, But It’s Your Problem

Early in my venture career, I worked with someone who gave me a lot of great advice about how to think about being an entrepreneur and an investor who supports entrepreneurs. We had just finished meeting with a founder who was dealing with a tough set of circumstances and was trying to figure out how to overcome his challenges. When I asked for advice, my mentor told me a simple but powerful thing that I still think about to this day and find myself repeating a lot in the current environment:

Sometimes it’s not your fault, but it’s still your problem.

I didn’t quite get that quote the first time I heard it. The more time I spend in the world of entrepreneurship and venture capital, the more I understand what this statement means. If you are a founder leading a company, you will encounter many situations where you have to deal with circumstances that are not your fault – you didn’t cause them, but they will impact your company and hence are your problem. They will block you from making progress if you don’t solve them. Here are a few examples of things that fall into this bucket:

  • Your sector is out of favor with investors, and it’s hard to raise money – I’ve talked to many founders who are building companies in sectors that have fallen out of favor with investors. Raising money in these sectors is hard; many investors have become skeptical or cynical about whether these sectors can produce large, meaningful companies.
  • Your existing investors don’t have any money to support your next round – Many companies raised rounds from funds flush with capital several years ago. Some of these funds no longer have the capital to make additional follow-on investments; it might have more to do with the financial position of those funds than it does with your performance. No matter why they can’t invest, their inability to invest is your problem to manage.
  • You hit the milestones that you thought would unlock the next round, but the goalposts moved – Some companies raised rounds that they thought would provide enough capital to get them to the next milestone and unlock the next round. The venture environment today is different from several years ago, and the bar has been raised. As a founder, you need to clear the new bar, not the one you thought you’d have to clear when you raised the round.

Right now, we are in a moment where many founders find themselves confronting problems they didn’t create but must tackle. This is not the time to complain or lament your fate – it’s your opportunity to rise to the occasion and push through despite the challenges.

I publish most of these posts on my Substack, Venture Reflections.

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