This is a great quote from Ben Franklin around individuals and relationships. I was catching up last week with a cool healthtech entrepreneur, Sundeep Bhan of NYC based Medivo (who recently raised a nice Series A $7M+ financing round led by Safeguard Scientific). We talked about a bunch of things, professional and personal, and about healthIT/HealthTech start-ups and innovation primarily (shocking I know). We both agreed there was a lot of activity was happening in this space, and it is a good time to be fundraising in this market if you’re a healthtech entrepreneur (as evidenced by this list of digital health companies receiving at least $2M in funding in 2011 as compiled by Rock Health, who has done some cool work in terms of compiling resources and data in this emerging sector of healthcare). However, just because you’re a start-up or a healthtech entrepreneur, that doesn’t guarantee fundraising is a given or easy. Sundeep shared his thoughts about how there are 3 simple rules that apply to fundraising, and they also apply in much of the same way to relationships. Having written about fundraising before in a previous blog (Shall We Dance) and likening the approach to middle school kids and dynamics around dancing/relationships, I was keen on teasing this thread out a bit further (with Sundeep’s blessing).
You basically have three key and simple considerations that apply to fundraising (and relationships) and need all three to work in your favor to optimize for success. If any single one consideration isn’t in your favor, it can result in failure for fundraising or a relationship.
1) YOU: You really can’t take this personally, but look - it could be just that YOU and the investor don’t click. A lot of early stage investing decisions are made based on team, and it’s important that beyond the necessary things YOU need to bring to the table (background, passion, hustle, etc.), that YOU click with the investor. Same as in relationships, you must first off know what you’re looking for or what you like (some type of criteria around what you’re interested in) in order to get started. Once you got that figured out, for some people that connection with another happens right off the bat. For others, it takes a few tries, a few more dates to figure each other out. And sometimes, YOU need to be prepared for the “it’s not YOU, it’s me” line and roll with it. As Ben Franklin basically says in the quote above, if you’re thinking about how the relationship “would be great if only s/he would change <fill in the blank>”, then you might be better served moving on.
2) IDEA: You need to be working on a compelling IDEA and opportunity. You must be able to clearly communicate what the opportunity and IDEA you have is. This clear articulation of vision, approach, and value proposition is essential if you are going to obtain funding. As it relates to relationships, the IDEA is basically the DTR (note - I’m not advocating when is the right time to even have the DTR, because as most know - even suggesting a DTR conversation can cause a relationship to explode). It’s key to explore what kind of IDEA you have for a relationship at this stage: exploring, casually dating, exclusively dating, marriage? For both fundraising and relationships, it’s best to be open and as honest as possible, and not hide information or thoughts. Life is short, and I believe everyone owes it to themselves to be honest with themselves first, and then to those around them. You shouldn’t oversell or undersell YOURSELF or the IDEA but you should be honest in your dealings to set the proper expectations.
3) TIME: this is probably the most important consideration, and worth analyzing across two dimensions. First - is it the right TIME in your NewCo’s life and development to be raising money, i.e. do you have just the proverbial cocktail napkin business plan, or have you already gotten two others full-time on board, have raised a little but of family/friends money, and have an alpha or beta to show? Second, is it a friendly TIME from a macro perspective to be raising money in your NewCo’s specific industry/sector? Right now, in 2011/2012 it’s a great time to be in the HealthTech space as there is a lot of excitement and opportunity in this area from an innovation perspective. In mid/late 2000, no matter how great YOU and your IDEA was, if it was in the internet/web space, you were not in an ideal macro environment for fundraising. As it relates to the relationship, as they say - it takes two to tango. You need to ask if YOU yourself are ready for a relationship at this TIME in your life (i.e. are you focused/obsessed on your career first, are you coming out of a serious break-up, etc.). And then the other person also needs to be at the right TIME in his/her life for the same relationship IDEA with YOU.
Well, I guess there is another consideration that also impacts things from a fundraising and relationship success perspective - luck. Of course, there are those that argue that one makes their own luck while others believe luck is random. I personally think it’s a bit of both… so no matter what, good luck, in all endeavors, personal and professional!