So you have a great idea for a business. What’s your next move?
First, take an honest assessment of your personality. Claire Lee, head of early stage banking at Silicon Valley Bank, has noticed three traits in successful entrepreneurs.
“Number one is adaptability: the ability to pivot, really be open to feedback and advice, knowing which to take and which to ignore,” Lee says. “Number two, and perhaps as important, is resilience and grit—you’ve really got to develop a thick skin. And third is resourcefulness—being able to leverage your network, know where to get help and not be afraid to ask for help, is critical.”
Did you check all three boxes? Great! Here are five more starter steps to help you forge a path forward:
#1. Consider all your financing options.
Venture capital (VC) isn’t the only way to go. There’s also debt financing, which is often based on revenue and is regarded as founder friendly because it won’t dilute your ownership. This option “gives you quite a lot of flexibility,” Lee says.
There’s also the “friends and family” route, which Sarah LaFleur, founder of M.M. LaFleur, took. Contrary to what you might think, you don’t need a rich uncle to write you a check for $1 million. At least for LaFleur, this route entailed many $20k checks from friends of friends and family. “You write an email to anyone who you think has any capacity to know somebody who might be wealthy, telling them about your company and asking, ‘Would you or anyone you know be interested in learning more?’” LaFleur explains.
#2. If you go the VC route, understand what no really means.
It doesn’t necessarily mean your idea isn’t viable or you shouldn’t start the company. “It could just mean it’s a sector the venture capitalist doesn’t love or maybe she’s just really busy right now,” says Ann Miura-Ko, a founding partner of Floodgate, a seed-stage VC firm in Palo Alto, CA. In other words, the noes are not a reflection of your business idea. They’re just part of the process of finding investors. Instead of hearing the no’s, Miura-Ko recommends listening for the one yes, which is all you need.
#3. Choose your investors carefully.
“Be incredibly thoughtful about who you partner up with from the very beginning, whether it’s banks, venture capital investors, or even friends and family,” advises Iris Choi, a partner at Floodgate. “They’re going to be part of your journey for the long run, so you want to be selective. We often joke that it is far easier to get divorced from your spouse than it is to get rid of your investor.”
#4. Find a side hustle.
It may take several years before you have funding, so you need to have money coming in that doesn’t require all your energy to earn. For LaFleur, that side job was tutoring for the SATs, which she did for two and a half years. “It paid my rent and it allowed me to focus on the startup,” she says.
#5. Prepare for a marathon.
After all, it won’t be a sprint. “It’s easy to lose track of that, especially in the tech-enabled, venture capital-fueled world, where everyone operates with such an incredible sense of urgency that you assume they’re only going to do this for a couple of years,” says Choi. But starting a business is a long-term, if not, life commitment.
This article is based on 2019 Watermark Conference for Women breakout session “Think Like a Founder: Your Questions on Entrepreneurship Answered.” Listen to it here.