The following is a guest post by Bill Douglas about divorce and the entrepreneur.
I got divorced when I was 24 years old while running my first company. I was fortunate that I didn’t have any kids so it was more like a nasty breakup after a long relationship, but the added complexity of marriage, family linkages, and all the emotional stuff surrounding it was one of the big (but not the only) input into the multi-year depressive episode I had.
I continued to run my company until we sold it when I was 27. But the struggle, stigma, and pain of the divorce lingered in the background for a long time. Fortunately, I ended up in a relationship with my now-wife Amy (I used to refer to her as my “current wife” – now she’s definitely the “last wife I’ll ever have.”) This relationship helped me get through this period of my life while running my company while dealing with all of my own shit at the same time.
If you are a divorced entrepreneur, Bill runs a closed Facebook group for divorced entrepreneurs (I recently joined it.) And, keep reading – his post is powerful.
I’ve been an entrepreneur all my life and I’ve been divorced for seven years now. Going through divorce was excruciatingly painful. Not just because of the divorce itself and splitting up a family, but because of the added loneliness common for most entrepreneurs.
In the past few years I’ve become acutely aware of the plight of the divorced entrepreneur. This seldom-discussed topic almost seems taboo in business circles. So many become isolated in this precarious, solitary, often disastrous, post divorce quandary, which I believe deserves more attention within the entrepreneurial community.
This is a real and significant problem. Since I began writing about this topic, so many entrepreneurs have contacted me. I’ve become immersed in the issue and am passionate about helping others in this stage.
The positive qualities that spark the entrepreneurial fire can become a liability when self-reliance inhibits the ability to self assess and acknowledge the need for assistance. That positive and driven nature can isolate, leaving one shouldering the weight of the world.
Entrepreneurs understand the stresses, the loneliness, the life of being the founder, the visionary, the reason you have a company. Add to that the pressures of a divorce process and it’s a recipe for depression. The entrepreneur becomes no longer alone simply in the business, but post divorce he/she is alone at home and in life, too.
I’ve seen entrepreneurs walk away from successful companies because they were so worried they were going to lose their relationship with their kids. They sought balance, but abandoned their assets and income. Yes, our kids are always more important than our work, No question there. But this is not an either-or scenario. We can be divorced parents and also be successful entrepreneurs.
I’ve witnessed entrepreneurs struggle with whether to tell shareholders and key personnel what they were going through at home, for fear of losing the confidence of those that believed in them. I know I struggled with this, and when I finally told my team they were upset I hadn’t shared earlier. Every one of them was incredibly supportive; it was my own fear that kept me quiet.
I personally know several entrepreneurs that struggle with anxiety, and even worse, depression after divorce. Their world is turned upside down. Their entrepreneurial “freedom” becomes their mental prison of loneliness and failure. For months after my divorce, I would take my sons to school and return home to get back into bed. I escaped the real world, and all the negativity that came with my emotionally imprisoned reality, by sleeping.
Without any doubt, keeping those negative feelings inside only harms us. Refer to How Keeping It Bottled Up Can Kill The Divorced Entrepreneur. “Particularly because I kept my emotions bottled up inside, as a divorced entrepreneur I became demoralized to the point that I and my company suffered.”
Eventually the day came when I’d had enough. I decided to begin rebuilding after divorce. I’d made the trek through the mud of divorce and now wanted to craft a new life, revive my business, and design my next chapter. Even when I made this critical and conscious decision, I had to do the work and be relentless through the process.
And, yes, there is a process. Winging here it is dangerous, not to mention painfully slow. As entrepreneurs we’re bold and often fearless. Age and experience have taught me to ask more questions and assume I don’t know, even when I think I do. In this case, I asked for help and sought experience shares. I had a counselor. I devoured books. I journaled. I did the self-work.
Going from simply existing in life and in business, struggling with depression, lacking the vision, energy and fire I once had, to mastering the family/life/business balancing act and onward to living ferociously again was a massive shift. This is no simple feat. It was exhausting on every level, but rewarding in ways I’d never imagined.
If you are an entrepreneur and you are rebuilding after divorce, I recommend beginning with these:
Note that none of these actions correlate directly to your business. The recommendation is to work less and rebuild you. Until I broke my patterns, all the angst was trapped inside me. That’s where the stress ate me alive. I wouldn’t wish that emotional dungeon on anyone.
Regarding stretching my circles, I related well with others in the same spot as me post divorce. I was fortunate to be in EO Colorado and there I found several other entrepreneurs exactly where I was in life. We collaborated, we shared stories, advice, books, tears, laughter, and yes, even drinks.
For this reason, I moderate a free but closed Facebook group for divorced entrepreneurs and invite all that fit this description to join here. Everything and everyone is there for the support of entrepreneurs rebuilding after divorce.
After I completed what I call the recovery shift, I worked much less and made much more. I became healthy and truly happy again. I am closer now to my sons than I’ve ever been. I don’t say these to boast. Instead, I share these to give you hope. If I can do this then anyone can – particularly an entrepreneur!
My mother-in-law (Amy’s mom) passed away last Sunday. The funeral was in Hotchkiss, Colorado yesterday. At lunch with her extended family, someone said something that stuck with me.
“No one gets out of this alive.”
I went looking for the source this morning and couldn’t find one. Amy thought it was Woody Allen, a Google search turned up Jim Morrison (due to the name of his book), Robert Heinlein was cited as saying something similar, but in the end I decided it didn’t matter. I just liked the statement.
We drove back to Boulder yesterday afternoon and got home around 9:30pm. We slept late and are having a quiet Sunday morning up in Amy’s office. It’s a beautiful sunny day in Boulder. I’m going for a six mile run in 30 minutes, we are going to have lunch at The Cheese Importers (where I’m running to), and I expect we’ll take a nap this afternoon. We’ll finish with a night in front of the TV watching The Oscars (and I’ll have my laptop in my lap, doing computer stuff while I pay partial attention to the TV.)
Basically, a normal and relaxing Sunday after an intense week. Amy handled her mom’s passing in an amazing way. It was an emotional week, with lots of ups and downs, and I tried my hardest to be present for Amy the whole week. While I blew it a few times, moments like this one show me what a remarkable person she is.
While I fantasize about the singularity and hope I live long enough to have my consciousness uploaded into something that allows me to continue to engage indefinitely, even if it’s a simulation of mortality, I accept the reality that life is finite.
When reflecting on the notion that “no one gets out of this alive,” I realize how incredibly fortunate I am to be living in the United States in 2016. I treasure my friendship. I value my freedom. I respect other’s opinions, whether they are similar or different from mine. While I get tired of many things, including the endless anger, vitriol, nastiness, discrimination, and hostility that exists in our society, I remember that this is part of the human condition and accept it.
Here’s to experiencing life to the fullest. Amy – thank you for being such an amazing partner.
The retrades have begun. Since the beginning of the year, I’ve experienced four retrades – two early stage, one growth, and one late stage – and I’ve heard of a number of others.
If you’ve never experienced a retrade, or don’t know what I’m talking about, it’s the situation when you have a firm deal agreed upon or a term sheet signed and are proceeding to closing a deal, when the investor (or acquirer) decides to change the terms of the deal. And, in case you were wondering, it’s always to make the terms worse, not better.
This happens regularly in M&A deals especially with buyers who are buying thinly capitalized companies or ones who don’t care about their long term reputation. It’s very prevalent with buyers who over time get the reputation as bottom feeders and is often something floated during the diligence process to test the conviction of the seller.
However, for the past six years or so, I haven’t seen retrades from VCs or angels investing in companies very often. Occasionally a deal will fall apart in diligence, some famously so, but they rarely have been retraded.
This lack of retrades, however, is not the historical norm. When I started investing in the 1990s, I experienced a lot of retrades from VCs at many different stages. While a term sheet isn’t binding, part of the reason it tended to be long and complicated was to avoid the retrade dynamic and spell out all the terms of the deal explicitly.
In the late 1990s into the mid 2000s, I viewed the risk of a retrade as continuous background noise in any deal – investment or M&A. The notion of deal certainty became important to me and I started spending more time working with investors and acquirers who I believed had a very high likelihood of following through on what they said they were going to do. In contrast, once I found myself being retraded by someone, I noted it and had a higher bar for working with them going forward, since I expected there would be a future likelihood of a retrade if I did something with them.
By the late 2000s, I had stopped being emotional about the notion of a retrade. I viewed it as a normal part of business, which impacted an investor or acquirer’s long term reputation, but was woven into the fabric of things.
And then the retrades more or less stopped. From 2010 forward, the entire VC market shifted into a mode that many describe as “founder friendly.” Investor reputation mattered at both the angel and VC level. Retrades were a huge negative mark on one’s reputation and word got around. As more and more investors showed up, valuations increased, and time to close a deal shortened, there was little tolerance for a retrade, so they disappeared.
As we are now about five months into a broad market reset, both for public and private market valuations, the retrade has reappeared in private investments. The first indicator of it is that it now takes longer for a deal to close. I expect the days of transactions closing 15 days after a term sheet is signed are probably gone for a while. While some lawyers are breathing a sigh of relief, a deal that takes more than 30 days to close often starts to have a little bit of retrade risk. And, when a deal stretches out over 60 days, there’s a lot of risk around deal certainty – both retrade as well as a full deal collapse.
Recognize that I’m talking about investments, not acquisitions. I never saw the retrade dynamic go away with certain buyers and certain type of acquisitions. However, what’s notable to me on the investment side is that the retrade is happening up and down the capital stack.
Last week New York was the third state to create a program – called the International Innovators Initiative (IN2NYC) – based on the construct of the Global Entrepreneur in Residence program.
This is a New York City based program created by the New York City Economic Development Corporation (NYCEDC) and the City University of New York (CUNY). IN2NYC is by far the most ambition program to date. It will help up to 80 selected entrepreneurs gain access to the visas they need to grow their businesses in New York City and is projected to create more than 700 jobs for New Yorkers in the first three years.
The first program was in Massachusetts and is a state driven initiative. The second program was in Colorado and is a privately funded initiative. The New York program is a city driven initiative.
When we started the Global EIR Coalition last year, we knew that Massachusetts and Colorado would be straightforward since they were both in process (MA was done, CO was almost done.) However, we didn’t know which state would be next. We’ve learned a lot about the process of getting things up and running, especially since each state or city university system, which is a key part of the Global EIR program, is different.
New York, as with many things that New York (and New Yorkers) do is big and ambitious. It’s impressive how the various constituents, especially the CUNY system and the NYCEDC, have come together.
After working since 2010 on the Startup Visa and being endlessly frustrated by the inability of Congress to get anything done, I shifted my focus last year to a state by state approach, using the legal and functional framework created in Massachusetts by a team that includes Jeff Bussgang, a fellow board member with me on the Global EIR Coalition. We have several more states in the pipeline to launch and I’m super excited about where this is heading.
If you are in a state other than Massachusetts, Colorado, and New York and are interested in playing a leadership role around the Global EIR Coalition, please email me.
I received plenty of interesting feedback on my post titled Sources of Insecurities. A good friend and one of our investors, Jamey Sperans, even put together a slide trying to process the concept. If you were interested in the original post, I expect it’ll be fun to ponder Jamey’s slide on a Sunday morning.
Yesterday I wrote about getting stuck in an hour long reading loop on the Apple / FBI situation. As much as I didn’t want it to happen again today, it did. More on that in a minute.
But first, I want to encourage you to go watch the movie Race which is the story of Jesse Owens and the 1936 Berlin Olympics. It was superb and the double entendre of the title played out for a full two hours as the movie made us think hard about race in America in the 1930s and what was happening in Nazi Germany at the same time. I also thought the acting by the primary characters, including Stephan James (Jesse Owens), Jason Sudeikis (Larry Sanders – Owens coach), and Barnaby Metschurat (Joseph Goebbels – Nazi propaganda minister) was incredible. Metschurat was a special bonus – he brought an extremely uncomfortable feeling of deep menace to every scene he is in.
At the end of the movie, the entire theater clapped (that doesn’t happen very often.) As Amy and I walked to our car, we commented that while we’ve made a lot of progress since 1936, we’ve got a very long way to go. On our way home, we talked about current events against a backdrop of 1936 racism in America and a systemic racism in preparation for a genocide in Nazi Germany. I read the NPR review of Race this morning after seeing the movie and agreed with everything in it.
This morning, as I was going through my morning reading stuff online, I fell down the FBI / Apple rabbit hole again. It’s interesting how the substantive analysis is improving every day, and I finally feel like I have my mind around the technical issue, the mistakes the government already made that prevented it from getting the data it wanted, Apple’s consistent and appropriate supportive behavior with law enforcement up to this point, the government overreach that is now happening, and the correctness of Apple’s position. In other words, nothing has changed in my opinion that Apple is in the right in this situation, but I can now explain it a lot more clearly.
If you want to spend time in the rabbit hole with me (I’ve set up a couch, have poured some drinks, and have nice music playing down here), here are some things to read.
As humans, I think it’s important to remember that the TechnoCore is paying attention to this and watching everything we do. Even if they are looking back at us from the future, what we are doing now matters.
Super Cooper (our new dog – now one year old) woke me up at 4:45 this morning so I got up, let him out, got a cup of coffee, sat down in front of my computer, and spent the next hour going down the rabbit hole of the FBI / Apple phone unlock backdoor encryption security controversy.
After an hour of reading, I feel even more certain that Apple is totally in the right and the FBI’s request should be denied.
The easiest to understand argument is Bruce Schneier‘s in the Washington Post titled Why you should side with Apple, not the FBI, in the San Bernardino iPhone case. His punch line is extremely clear.
“Either everyone gets security or no one does. Either everyone gets access or no one does. The current case is about a single iPhone 5c, but the precedent it sets will apply to all smartphones, computers, cars and everything the Internet of Things promises. The danger is that the court’s demands will pave the way to the FBI forcing Apple and others to reduce the security levels of their smart phones and computers, as well as the security of cars, medical devices, homes, and everything else that will soon be computerized. The FBI may be targeting the iPhone of the San Bernardino shooter, but its actions imperil us all.”
Given that the law being used to try to compel Apple to do this is based on the All Writs Act of 1789, precedent matters a lot here. And, if you thought the legal decisions from 1789 anticipated the digital age, please fasten your seat belts – or maybe even encase yourself in an impermeable bubble – for the next 50 years as it’s going to get really complicated.
Once I got past the advocacy articles like Why Apple Is Right to Challenge an Order to Help the F.B.I. in the NY Times, I read a few of the “what is really going on here” articles like Wired’s Apple’s FBI Battle Is Complicated. Here’s What’s Really Going On. The context was starting to repeat, so I got it at a high level but wanted to understand the technical underpinnings of what was happening.
Since it’s the Internet, it was pretty easy to find that. The Motherboard article Why the FBI’s Order to Apple Is So Technically Clever was a good start. Dan Guido’s Trail of Bits post Apple can comply with the FBI court order was super interesting since he only focused on the technical aspects rather – focusing on feasibility rather than getting tangled up in whether it’s a good idea or not. Ars Technica has an article that ads a little in Encryption isn’t at stake, the FBI knows Apple already has the desired key.
I think wandered around a few random articles. Troy Hunt’s Everything you need to know about the Apple versus FBI case has some great historical context and then unloads with current activity including Google’s CEO Sundar Pichai’s Twitter support of Apple / Tim Cook. I ended with Why Tim Cook is wrong: A privacy advocate’s view.
Interestingly (and not surprisingly), the titles don’t reflect the actual critical thinking you can derive from reading the article, so just scanning headlines creates huge bias, whether you realize it or not. When I started reading the various articles, I immediately forgot most of the headlines and was surprised by some of them when I put this post together since the headline didn’t correspond with the message of the post.
I expect there will be lots of additional commentary on this as it continues to unfold in court and in public view. What I read, and thought about this morning, reinforced my view that I’m very glad Tim Cook and Apple are taking a public – and loud – stand against this. We are going to have to deal with stuff like this with increasing frequency over the next 50 years and what happens in the next decade is going to matter a lot.
After all these years, I’m still a heavy RSS user. Every morning I click on my Daily folder in Chrome, open it up, and spend whatever time I feel like on it. The vast majority of what I read is in Feedly and includes my VC Collection as well as a bunch of other stuff. It’s almost entirely tech related, as I stay away from mainstream media during the week (e.g. no CNN, no CNBC, no NYT, no WSJ, no USA Today, no … well – you get the idea) since I view all this stuff as an intellectual distraction (and much of it is just entertainment anyway, and I’d rather read a book.)
This morning I came across a number of interesting things that created some intellectual dissonance in my brain since they came from different perspectives. I’d categorize it as the collision between optimist and pessimist, startup and already started up, and offense vs. defense. However, they all shared one thing in common – the message and thoughts were clear.
Let’s start with Tim Cook’s remarkable Message to Our Customers around the San Bernardino case and the need for encryption. My first reaction was wow, my second reaction was to read it again slowly, and my third reaction was to clap quietly in the darkness of my office. I then went on an exploration of the web to understand the All Writs Act of 1789 which is what the FBI is using to justify an expansion of its authority. I love the last two paragraphs as they reflect how I feel.
“We are challenging the FBI’s demands with the deepest respect for American democracy and a love of our country. We believe it would be in the best interest of everyone to step back and consider the implications.
While we believe the FBI’s intentions are good, it would be wrong for the government to force us to build a backdoor into our products. And ultimately, we fear that this demand would undermine the very freedoms and liberty our government is meant to protect.”
Thank you Tim Cook and Apple for starting my day out with something deeply relevant to our near term, and long term, future in a digital age.
Shortly after I came across Danielle Morrill’s post Surviving Whatever Comes Next and Heidi Roizen’s post Dear Startups: Here’s How to Stay Alive. I’m an investor in Danielle’s company Mattermark and was partners with Heidi at Mobius Venture Capital. I have deep respect for each of them, think they are excellent writers, and thought there were plenty of actionable items in each of their posts, unlike many of the things people I’ve seen in the last few weeks about how the technology / startup world is ending.
Unlike the sentiment I’ve been hearing in the background about deal pace slowing down (not directly – no one is saying it – but lots of folks are signaling it through body language and clearly hedging about what they are actually thinking because they aren’t sure yet), our deal pace at Foundry Group is unchanged. Since we started in 2007, we’ve done around ten new investments per year. I expect in 2016 we’ll do about ten new investments, in 2017 we’ll do about ten new investments, in 2018 we’ll do about ten new investments – you get the picture. We have a deeply held belief that to maximize the value and opportunity in a VC fund, investment pace should be consistent over a very long period of time. We did about ten investments in 2007, 2008, and 2009 – which, if I remember correctly, is a period of time referred to as the Global Financial Crisis. Hmmm …
So it was fun to see my partner Seth’s post titled Welcome to Foundry on the same morning as Danielle and Heidi’s posts. That started the intellectual dissonance in my brain. If you want to see what Seth sends every company he joins the board of after we make an investment in, it’s a good read. It also clearly expresses how we approach working with companies the day after we become an investor.
I then read Ian Hathaway‘s great article for the Brookings Institute titled Accelerating growth: Startup accelerator programs in the United States. There are a few people doing real research of the impact of Accelerators and Ian’s work is outstanding. If you are interested in accelerators, how they work, how they impact company creation, and what trajectory they are on, read this article slowly. It’s got a bonus video interview with me embedded in it.
I’ll end with Joanne Wilson’s post #DianeProject. Joanne shared a bunch of info about the #DianeProject with me when we were together in LA two weeks ago. While I don’t know Kathyrn Finney, I now know of her and her platform Digital Undivided. I strongly recommend that you pay $0.99 (like I just did) to get a copy of the report The Real Unicorns of Tech: Black Women Founders, #ProjectDiane. The data is shocking, and there is an incredible paragraph buried deep within it.
“A small pool of angel and venture investors fund a majority of Black women Founders. For those in the $100,000-$1 million funding range, a majority of their funders were local accelerator programs and small venture firms (under $10 million in management). One angel investor, Joanne Wilson and Gotham Gal Ventures, has invested in three of the 11 companies that raised over $1 million. On the traditional venture rm side, Kapor Capital and Comcast’s Catalyst Fund have invested in at least two of the Black woman-led startups in the $1 million club. Wilson, Kapor, and Comcast often invest together, aka “co-invest”, in companies, thus increasing the amount of funding a company receives.”
So – was that more interesting than CNN or CNBC?
A few weeks ago I noticed my post How Can This Be A Billion Dollar Company? getting a surprising number of new Twitter shares. Since I wrote it in the summer of 2014, it must have been picked up somewhere and hit a new chord. I wish I had titled it what was in my mind when I wrote it, which was “How Can This Be A Billion Dollar Company and other bullshit VCs ask early stage companies” – that would have been more fun to see in my Twitter feed.
I took the weekend off, spent time with friends, had an awesome Valentine’s dinner with Amy, and read Barry Eisler’s newest book The God’s Eye View (excellent – five stars – I love everything Barry Eisler.)
While going through my daily reading this morning, I came across a bunch of posts talking about how the sky was falling, Silicon Valley was in turmoil, financing was drying up everywhere, and all the unicorns were doomed.
Whatever.
In the midst of all the very predictable noise, much of it not really saying anything particularly insightful, were three posts by friends that I thought were extremely useful and very relevant. I encourage you to read each of them slowly and think about both what the writer is saying and what it means for you and your company.
Let’s start with Mark Solon’s Some Gray Haired Insights For New Investors. Buried deep within in a nice reminder of one of my fundamental beliefs.
“I remember a series of conversations I had with Brad Feld in 2008 about his perspective on investing through various parts of economic cycles. Brad was (and is) resolute in his belief that creating outsized returns in the venture industry demands ignoring the macro environment as it relates to investment pace.”
Mark says plenty of other things, along with walking us through some dynamics in 2008 around the macro, startups, and the global thermonuclear financial freakout that was occurring.
Ok – let’s move on to Mark Suster’s What Most People Don’t Understand About How Startup Companies are Valued. Mark also has a nice call out to me that helps explain why he writes posts list this one.
“When I started blogging it was because I was inspired by Brad Feld. When I was an entrepreneur there was no public information about how term sheets worked or how investors thought. Brad was openly writing about this and it felt like he was giving the VC playbook away for free! I always wanted to work with Brad for this reason so I started blogging because I figured if transparency worked for Brad I would try the same approach. Nearly EVERY smart VC I know has been talking privately for the past two years about how ridiculous valuations in private markets have gotten and how a reckoning was coming. Most prefer not to say this publicly for two reasons: 1) they have an entire portfolio of startups, many of whom are raising capital and 2) they prefer not to be attacked publicly or seem “anti entrepreneur.” But I promise you they’ve been saying it privately. So my talking up over the years is more trying to shine transparency on what we’re already saying in private rooms.”
Mark is on a monstrously awesome blogging roll right now. This post, along with the last N that he has written, have been outstanding. While I don’t agree with everything Mark says, it’s super important context for what is going on.
And then Alex Iskold, who runs Techstars New York, reminds us why this is a particularly good time to create a startup.
When you are done reading those three posts (and – if you haven’t – go read them – seriously – it’s worth the time) you should sit quietly for five minutes. Take a very deep breath. Figure out what you can actually impact today, and then go do it. And shut out all the rest of the noise.