horsepigcow

There are multiple schools of thought on raising money. And no, I’m no authority on it (as I am still yet to be successful), but I have spoken with many startup founders and observed many others. But the two major ends of the spectrum of raising early money is:

• Raise the basics of what you need to get to your next goal (usually 12-18 months)
• Raise as much as you bloody well can

After witnessing some extreme examples of the latter (Color and Blippy are two that come to mind) get hyped and then fizzle, while watching companies like AirBnB and Sonar get really creative with smaller amounts, I have a tendancy to favor leaning more towards the former.

There really is not a rule to anything — and I’m not a fan of that type of thinking — but I heard a story the other day that made me pause and wonder how much it applies to startups. Basically, it goes like this:

A guru gives a young boy a butterfly forming in a cocoon and tells him not to help it, no matter how much he wants to but the boy does it anyway and the butterfly dies. The guru tells the boy:

“You don’t understand. You didn’t understand what you were doing. When the butterfly comes out of the cocoon, the only way he can strengthen it’s wings is by beating them against the cocoon. It beats against the cocoon so it’s muscles will grow strong. When you helped it, you prevented it from developing the muscles it would need to survive.”

It may or may not be a true story, but I like the sentiment. With every struggle we’ve been through, with every set back and with every challenge I am learning something about myself, building a business and I am growing. I’ve made mistakes, but learnt to fail fast, learn and move forward. I’ve learned to be agile and to ask for direction. I’ve sought out mentors to guide me. I’ve learned that I am stronger than I thought I was. I’ve learned what I didn’t think I’d ever need to learn. I’ve discovered I can sacrifice and the depths of my commitment to Buyosphere and my team.

And, sure, I may be justifying all of my struggle to make myself feel better, but I truly believe this is all part of the startup story. I fell in love with AirBnB because of theirs (the campaign cereal). And as I feel like I’m getting closer to the ability to hit the road running, I’ve learned some fundamental lessons on how to run so that we run faster, smarter and more efficiently. In the shadow of the Goliath funding round we just found out a potential competitor (that came out of nowhere) raised, I feel our team is well-equipped to face the future battle.

None of this would have been possible if someone dumped a boatload of money on us from the beginning. And when we finally do raise the money we’ve been looking for (which is enough for the next 12-18 months), I’ll really appreciate it.

My muscles are strong. It’s time to fly.

Four and a half years ago, I started talking about how the currency in online communities is social capital…or Whuffie…and subsequently wrote a book on the subject. I had gained enough social capital in the online community space to be blessed by a book publisher to write a book as a thought leader on the subject. I didn’t even need to knock on any doors.

The social capital I gained that gave me leverage was, largely, through connections. Sure, I knew what I was talking about. I was living it. Studying it. Creating it. I was fairly knowledgeable on the subject (although the subject was -and still is- still a fuzzy area, so nobody can really gain expertise in it). But the biggest reason I gained enough leverage to get a book deal was because of my connections. I could get quotes from Michael Arrington, Jimmy Wales, Biz Stone and other movers/shakers in the biz. Others blogged about my posts or sent them around to others (through my stats, I could see more of my posts were being passed around by email than any other method – and usually within organizations).

And, yes, I worked hard. And, yes, I was early enough to stand out. And all of that. But I’d say I had unique access to networks because:

• I’m a white, middle-class, educated woman
• I’m attractive
• I had a whole lot of years of opened doors behind me that came from me being the above

So when I read Jon Bischke’s post “What Really keeps Poor People Poor” I cheered out loud for his cogent statements like:

“(P)eople from lower-income families aren’t able to gain access to the same networks that higher-income families have access to.”

and

“Poverty is not deprivation. It is isolation.”

I feel like I’m living proof of the advantage of the power of networks on my income every single day. I was raised in a small town in Alberta. I had never heard of the Venture Capital world. Who knew there was a rather large group of people who gave money to another group of people in exchange for a company that is worth nothing (but may be worth something someday)?

I discovered this world in the early 00′s and was fascinated by it. Now I’m in the midst of raising money for my own company in this manner. My company will be valued at a guestimated amount of money based on a guestimated future marketplace. It’s pretty wild if you ask me. Of course, this happens because those guestimated numbers and future marketplaces actually pay off…and sometimes in bigger numbers than dreamt up. So it’s worth the gamble for the investors.

But the part of this whole world that really baffles me is the access part of it. Certain people have access and certain people don’t. Not that there is some bouncer at the door that stops one group of people and allows another, but knowing someone means the difference between getting a meeting and not getting a meeting. And then there is a difference between how that meeting goes depending on the type of introduction.

Introduced by a friend of an angel/VC? Pretty good. May be more patient with you and give you good feedback. Not a slam dunk, though. Introduced by a portfolio company CEO? Pretty good. Not a slam dunk. Introduced by a portfolio company CEO with a good exit? Awesome. Depending on the level of enthusiasm from the CEO (better yet, why not bring them along), could be a HUGE slam dunk. Introduced by another angel/VC? Awesome. But only if that angel/VC says they are wanting to invest. Then it’s pretty much a slam dunk. If it’s a ‘pass off’ (“I met with them and am not investing, but you may want to”), it is not.

Y-Combinator is a slam dunk because of Paul Graham and his connections. Accelerators have been around for ages. This one is special because of the man behind it. Because of his connections. The reason why the value of many other accelerators is questionnable is because they don’t have the same prestige. And that prestige has everything to do with social capital.

Why do people go to conferences? The connections. Why do people go to university/college? The connections. Sure, you can learn stuff and grow your talent, but as Bischke’s article states, you can get access to all sorts of knowledge, talks, lectures and resources online, too. It’s not the content, it’s the connections. And when the barrier to entry is high (Conferences like TED or The Lobby – schools like Harvard), it’s a signal that you now have access to those connections, too.

Over and over again, I’m observing how valuable connections are. Social classes aren’t dead by any means. If anything, they’ve become more powerful than ever. In a world that is incredibly connected and competitive, it’s getting more and more important to separate the signals from the noise and social class is an easy way to validate a strong signal.

For the record, I’m not endorsing this. I’m merely observing it. I’ve been told repeatedly that the web creates meritocracies, but from personal experience, I’ve seen that the world that controls the web also reinforces social hierarchies. It’s a bit confusing. Doors are opening, but getting through them is easier for some than others. Knowing this makes it easier to break into ‘the club’. Unfortunately, entry to the club is easier for some than others.

You can have the world’s coolest idea, be amazingly smart and have executed perfectly, but without that ‘social proof’ (ex-Googler, former exit, introduced by the right people, etc.), you will have a tougher time getting through the noise. I sometimes wonder how many companies have failed because they ran out of money before they could get through the ranks. I’ve heard stories first hand. There are probably many more.

Hopefully programs like Angela Benton, Wayne Sutton and Toby Morning’s NewMeAccelerator will go a long way towards creating connections for those previously on the outside. And personally, I’d love to answer Bischke’s call for increasing access to networks for those on the outside. As I work my way inside, I’ll continue to share my own experience with access, then when I exit and set up my own venture firm someday, I’ll focus on finding, meeting with, working with an mentoring those with great ideas.

So I was sitting on my sofa having my nails done on a Sunday night after a lovely day filled with Spa, light shopping, stopping for an ice cream treat, going for a nice run and generally enjoying the day and I stopped and thought to myself, “Hey. Wait a minute. What’s wrong with this picture?”

Well, what was wrong with this perfect picture is that I was spending this amazing Sunday with someone I call my boyfriend. And, according to me not too terribly long ago, that was NOT going to happen.

It turns out that, with the right partner, love and greatness are not mutually exclusive. They can exist together! I’m cautious to claim that my experiment has been proven and is completely conclusive as I have yet to achieve much in the department of greatness and the love I’m enjoying is pretty new (only a couple of months in), but I thought I’d share some observations on what kinds of conditions need to exist to make this happen.

Condition #1: Listen to The Force

The Force is an incredibly geeky way to say that there is something completely uncontrollable about this. It’s that moment that cannot be forced when you meet that person and think to yourself, “Holy crap. I just saw a flash of us growing old together.” And the worst part of The Force is that it’s usually what happens to the man, not the woman. We (as women) are too busy reading dating advice columns and making lists of what we need in a man, then going on dates and assessing whether or not this specimen fits that list. But that’s okay. That’s what we do (or at least most of us). Women are by-and-large rational daters. I know it seems counter-intuitive, but we are. That’s why this quote from My Blue Valentine really struck a chord with me:

I feel like men are more romantic than women. When we get married we marry, like, one girl, ‘cause we’re resistant the whole way until we meet one girl and we think I’d be an idiot if I didn’t marry this girl she’s so great. But it seems like girls get to a place where they just kinda pick the best option… ‘Oh he’s got a good job.’ I mean they spend their whole life looking for Prince Charming and then they marry the guy who’s got a good job and is gonna stick around.

It’s kind of true. Carlos ‘knew’ minutes into our first date and he was going to fight to make me ‘know’ in spite of my protests of being “too busy for a relationship.” And he fought in the most gallant, amazing ways that really took me by surprise and made me think, “OMG. This man is crazy and awesome and makes me feel loved like I’ve never felt before. And in every other relationship I’ve been in, that has been what I cried about. How can I pass him by?” He made me want to fight for him, too.

It can’t be just something. It’s gotta be THAT ONE THING. Your life is big, girlfriend. Your love should be, too.

Condition #2: This is a Drama Free Zone

Yes. Yes. Love and relationships are all about compromise, right? Sure…when it comes to planning activities and sides of the bed. But too many compromises means that there is a blatant mis-match. And if there are compromises to your life’s dream and work, this won’t work.

Love and greatness only works together if it works together. If the love is full of drama and fighting and resentment and giving up time doing what you love to do, then it will rip you apart, cause you stress and leave you with nothing in the end.

Funny thing is, I find myself working more efficiently these days because I want to have time to cuddle up and watch a movie later on instead of working until 2am. The other advantage to meeting someone in our late 30′s is that we already have lives established before one another. Both of us have plenty of things we do independently. He has a career and buddies and activities he enjoys doing. And when we can, we invite one another cause we like being together. But there isn’t pressure to spend a certain amount of time together. Just quality time when we do.

No drama. No resentment. It’s all about supporting roles.

Condition #3: Learn to Receive

As a woman conditioned to never need anyone, this has been the hardest thing for me to get used to. Carlos is a giver. He thinks about how he can make me happy all day long. Really. I know. This is awesome, right? Only thing is it felt like an embarrassment of riches when I first started experiencing it. I didn’t know what to do with any of it. I told him to stop because I didn’t have the time or energy to give back. But he told me he didn’t care. It makes him happy to make me happy.

Why the heck was this so hard for me?

Then I decided to just let go and accept it. Accept the attention, the generosity, the amazing little things he did: creating mini-adventures, leaving notes for me to find, setting up private tumblr accounts to record ‘our private thoughts to one another’, buying stuff he’d see me post on Buyosphere as WANT!s, and continuing to formally ask me out on dates…and guess what? I started to freakin LOVE it. I became that princess I was always told I shouldn’t expect to be. And, dammit, I was ripped off before! This feels great. I used to be the one who came up with the cute ways to say “I love you”. Now someone else thinks of it for ME. And because I know how to give it back, when I have the chance, I give it back.

I’ve seen this part trip up loads of ambitious women. They’ll reject all of the men who come along and want to pamper them because they’ve been so conditioned to believe they need nobody that they can no longer accept someone who wants to make their days brighter and easier. Egad, I have someone who wants to pick me up at the airport and offers to do my errands. I needed that. And I’m not afraid to admit it.

Condition #4: Pay Attention to the Little Things

As listed in the previous condition, Carlos is the master of the gesture…big and small. And I hate to admit it, but it’s the small gestures that get me the most. The other day I was rifling through my wallet for a receipt and I found a note that told me I rock his world. It was just a small handwritten scrap ripped out of a notebook, but it made me smile bigger than I’ve ever smiled before.

I’m busy. He’s busy. Changing the world is a big time-suck. So those little gestures are perfect morsels of happy to infuse the middle of my day. They don’t take an hour of my attention and right after I enjoy the burst of joy I get from something like a note or a text message, I can re-focus on my task at hand. Even better, that little reminder that I’m adored improves my overall mood and ability to handle the road ahead.

It doesn’t have to be all big displays and full attention grabbing gestures. Those small bits are perfect bite-sized breaks that keep the stress levels low.

Condition #5: His High Conscientiousness Levels

I never thought that I would find stability SO attractive in a man. I thought I was looking for an artist or another entrepreneur…someone who faced the world with the same careless abandon that I do. Then I met Carlos and fell in love with the fact that he has an amazingly high level of conscientiousness.

Not that it’s impossible but dating fellow entrepreneurs, dreamers, artists and other equally unstable, but exciting guys, will rarely fulfill the previous 4 conditions. Their FORCE is focused on changing the world, with unstable usually comes HEAPS of drama (anxiety, depression, moodiness, aspergers, etc), no time to give or think of how to make me happy through amazing little gestures (“Hey, I have a world that needs me and you are whining about not being asked out on a date? Selfish!”).

Having one partner who is focused on making the relationship and home life exciting is essential. He needs to be conscientious. Almost like a…um…wife. I know that sounds sexist, but the metaphor is still unfortunately recognizable.

And this doesn’t mean that Carlos or any other guy that is highly conscientious is a passive weenie. Not in the least. I find doormats unattractive. That man still needs to have all of those basic qualities – strong, smart, funny, attractive, fun, fit, healthy, sexy, cultured, reliable, interesting, stylish, etc. – that are part of my ‘list’ in order to be such a big part of my life.

And yes, I know what you are thinking: That is a TALL ORDER! A freakin impossible list of conditions ON TOP of our previously freakin impossible list of qualities! There is no WAY on earth that I’ll ever find someone!

Well, I did and that is a bloody miracle. And if I can, you can.

And, for the love of god, don’t settle for less because without all of the above, love and greatness will have a tough time co-existing. Without #1, love won’t happen at all (and I know you can’t control it. Deal with it). Without #2, you’ll exhaust yourself emotionally. Without #3, you’ll lose the romance (I’ve been in that relationship and it’s heartbreaking). Without #4, you’ll feel resentment. And without #5, you’ll never see one another anyway.

Now…I need to take these same principles and adjust them for raising money…or buy a lottery ticket, because I’m feeling quite lucky!