We’re living in the era of VC-backed everything. These days, it can feel like every new startup is raising seven figures, or working toward a seed, A, B, or C round. To make a cheesy analogy, investors are the new black, and everyone is getting in on the million-dollar action and billion-dollar evaluations.
As a business owner, I can tell you that those million-dollar investments aren’t the norm. For most of us (82%, according to a 2012 Global Entrepreneurship Report), that money comes from our family and friends, or out of our own pockets. And while some entrepreneurs might have access to million-dollar funding outside of venture capital, the majority of us don’t fit into that bucket.
I’ve started two self-funded companies–one of which was eventually acquired–and one of the things I realized is that we don’t often get the notoriety of venture-backed companies. As a result, it’s easy to feel alone–even though we’re technically the majority. In my entrepreneurial journey, I’ve learned a few lessons that kept me sane during the uncertain (and lonely) times that come with starting something from scratch.
1) I embraced getting my hands dirty
When you’re a founder of a self-funded business (and your business is running on a not-so-large budget) you need to be an operator–at least at the beginning. It’s usually not wise to hire a large executive team and throw money at every problem. At various points, I’ve been the HR, finance, account manager, the coffee maker, and the deal-closer.
Of course, when my company got to a point when we had the necessary momentum (and I needed to focus on scaling and growing the business rather than on entry-level, time consuming tasks), I started hiring. But I waited until my business saw more money coming in than what it was bleeding out. After all, I didn’t have the luxury of relying on a third-party for cash injection–it was all up to me to bring money to the company.
2) I hired employees who were entrepreneurially minded
I discovered early on just how much of a roller-coaster starting a business can be. This means that you need to have a team around you to lean on. But you can’t have just anyone. You need to identify what kind of roles you need to fill to move your business forward, and be brutally honest about the kind of individuals who can fill those spots. Often, this requires you to look beyond pedigree and resumes.
One of my first hires at my company was a Harvard grad (check), with internships at great companies (check) and a professional network in the Los Angeles area (check, check, check). She turned out to be a slow and methodical worker and a perfectionist. To be clear, these are not bad qualities to have–in fact, in some companies, they would be valuable assets. But at my fast-paced startup, one of our key differentiators was being nimble, quick, and accessible to our clients. At times, it was more critical for us to get something out the door rather than spend additional hours (or days) perfecting it.
My second employee was a state school grad who majored in English. Compared to the Harvard grad, her credentials didn’t look that impressive on paper. But it turned out that her fire, hustle, and eagerness was precisely what I needed, and she quickly became one of my most significant assets, and continued to be for over four years.
When your business is in its early stages, you need to hire employees with an entrepreneurial spirit. Look for someone who is not afraid to wear many hats, who doesn’t believe that any task is beneath them, and who isn’t counting down the hours until 5 p.m. or their next vacation. You will face many struggles–but they’re easier to bear when you have someone who is experiencing them with you.
3) I learned to be comfortable making less than what I made at my previous full-time jobs
Making less money is obviously not fun. But, when you’re trying to get a self-funded company off the ground–you’ll find that all of your blood, sweat, tears (and cold hard cash) will go into making the business work, especially in year one.
When I became an entrepreneur–I had to pay myself significantly less than what I was earning in my corporate jobs. Fortunately, I was able to cover my day-to-day expenses, but I had to put aside life’s little luxuries on hold as I focused on growing my company.
4) I taught myself how to be resilient
Perhaps the most important lesson I’ve learned along the way is that being an entrepreneur of any kind requires resiliency. I learned this the hard way–from losing friends and clients, breaking up with a business partner to fighting for money I was owed (but not paid).
When you’re in charge, these types of situations are inevitable. As a small self-funded business owner–you often need to take the brunt of every issue because you don’t have the luxury of an expensive legal team to back you up. Sometimes, your team will make mistakes–but you’ll end up paying the price. When it’s your business, this is a feeling that you just have to get used to.
Starting a self-funded business–and seeing it grow–has been an exhilarating and rewarding process, and I wouldn’t trade it for anything else. But as my experience reveals–it’s been far from smooth sailing. If you’re a small, self-funded business owner–just remember that you’re not alone in your journey. These four lessons have helped me through my crazy ride, and they might help with yours too.