There are many ups and downs, but the thrill is like nothing else.
My wife and I just got back from frolicking around LA with our four young kids for a week with, of course, stops in Disneyland and Knots Berry Farm. Interspersed between rides and bathroom stops, I was on the phone helping a handful of companies that we have funded in the Promus Ventures community raise additional capital (no medals for me, it’s my job). Some thoughts on theme parks and fundraising:
- Have a plan — At the beginning of each day, my wife and I unfolded our park maps and plotted how we were going to best tackle a park with four kids of various heights (and thus able to ride only certain rides). The best founders start with a strategic list of who they want to partner with, and don’t just take any call. Different investors bring unique skills, and uncorrelate your group of investors. (Full disclosure: unlike good founders, my wife and I did no prep prior to getting to each park. Hilarity ensuded).
- That plan includes being tired — Very few startups would say that fundraising was quick and painless. Fundraising is a continual process that takes on different faces at various stages of a company’s life. Good founders are continually building relationships, whether for capital and/or advisory functions. It is long and ardous. (Eating Mickey Mouse ice cream Dove bars during the late afternoon helped — maybe a suggestion).
- Expect the unexpected — Rides close when you wait 30+ minutes and are just ready to board. Trams don’t pick up on time. The lines on the height boards can vary (trust me). Investors will be all in until they’re not. Hours will be spent talking to good firms who at the end say one partner isn’t comfortable and they can’t move forward. Get used to wild reasons as to why investors are not moving forward.
- Raise more cash than needed — Disneyland isn’t cheap. But after a day (or three) there, one understands why. It is a well-oiled machine with thousands of workers making sure everyone goes home happy. Technology has made it easier than ever to start a company, but building one for the long term takes significant capital. Founders shouldn’t get too cute on valuation or terms. Get it done.
- You will question why — There will be many moments that you ask yourself, “What am I getting myself into?” (Sitting at the start of a coaster that is about to go from 0 to 82 mph in 2.7 seconds was one for me — pic above and see video). Founders are responsible for team members and their families who have both sacrificed much for the startup. The pump has been primed, forecasts call for certain amounts of cash, and when it doesn’t come in on schedule, things can get dicey. Pack the Tums.
Don’t let the façade of glittering castles and smiling people on the brochure fool you into Fantasyland. Every startup needs capital to grow, and since cash = oxygen, make sure you have plenty to survive. Like any good amusement ride, there are many ups and downs, unexpected bends and turns, but the thrill is like nothing else. And why we keep coming back for more.
Recipients of this post are not to construe it as investment, legal, or tax advice, and it is not intended to provide the basis for any evaluation of an investment in any fund. Prospective investors should consult with their own legal, investment, tax, accounting, and other advisors to determine the potential benefits, burdens, and risks associated with making an investment in any fund.
