Sometimes I’m calm through the meltdown, handling the situation with a deep level of acceptance and love. Sometimes I yell, matching her decibel for decibel. Yelling is the worst. It escalates the situation, guaranteeing that it will take longer to resolve. It also leaves me feeling hollow and regretful, like I have a gaping wound in my soul.

I think to myself, how did I become The Dad That Yells? I think about the father that I want to be. I think about the father that I have and how he was with me when I was a kid.

A memory from my childhood jumps out from the distant past. While out riding bikes in the neighborhood with my friends, we were talking about times we got in trouble. After proudly contributing my story of misbehavior, I add, “my dad was so mad! He really yelled at me!” I’ll never forget that my friends laughed in disbelief. “Your dad doesn’t yell,” they chided. “If you want to hear a yelling, come to my house!” Then they all tried to one-up each other with stories of their dads screaming at them.

My parents were—and still are—gentle, thoughtful and deeply loving; their disappointment in me was often the punishment enough.

So how did I become The Dad That Yells? I wonder this after I’ve managed to somewhat pull myself together and demonstrate that a 40-something is, in fact, fully physiologically able self-regulate emotions—even after having recently proved the opposite.

Why did I lose my temper and yell? What is wrong with me? That sort of self-reflection which leads to self-recrimination, spirals me downward. 

The strange thing about my child’s meltdown is that after she’s fully emoted with every single atom in her body, she’s done. The valve is off, and she’s ready to play. Many times, my daughter has come out of her room, face puffy and red from non-stop crying, beams a huge smile, and says in a voice raspy from twenty minutes of screaming, “Daddy, guess what? I thought of something fun we can do together!”

I stand there dumbfounded. Partially because I’ve been spiraling downward about being The Dad That Yells, berating myself for just absolutely fucking up this fatherhood thing. And partially also because, for the last twenty minutes I’ve been the brunt of a non-stop barrage of verbal and emotional assaults from this child.

I think about the latter part as though someone handed me a steaming bag of dogshit. I’m just standing there, holding this giant, stinking bag of shit, custom-crafted just for me by my little girl, and now she is all smiles and wants to play?!

Gobsmacked, I believe is the term I’m looking for.

I think about my parents again. I think about my dad. What did my dad do with all the bags of shit I handed him? When I think about the things I did as a kid—or worse, as a teenager—it’s a wonder they still pick up the phone when I call, let alone still love me and want to see me.

The accumulation of the awful, foolish things I did, whether purposefully, spitefully, or simply to try and get away with it, the weight of it could be unbearable. But there’s no resentment from my parents. They’re not carrying around any of that shit.

That’s the thing about a bag of shit: you don’t have to carry it around. You can set it down. But in the heat of the moment, it’s really, really hard to set that shit down.

My daughter is smiling hopefully at me through her puffy eyes. My mind is reeling with introspection. I’m standing there, gobsmacked, yes, but also with the realization that I’m holding two bags of shit. One that she lovingly crafted for me, the other that I made for myself out of self-recrimination.

How do I put these down? How do I move forward?

The answer is simple: forgiveness.

Fatherhood is forgiveness.

I have to forgive her—wholly, completely, and instantaneously. It’s the only way to put that bag down. Just as important, I have to forgive myself. I can’t be the father that I want to be if I’m going to carry around a bag of my own stinking shit.

I think about my dad again. He has forgiven me for all of my transgressions. I don’t have to ask him—I know it deep in the core of my being.

Fatherhood is forgiveness.

Fatherhood is forgiving your children because you love them so deeply you could do nothing else but forgive them. Fatherhood is forgiving yourself because without that you could never be fully present, loving them with your whole self.

“Daddy?” she breaks me out of my reverie.

I climb the stairs and together we talk about forgiveness.

It’s spring 2024. We’re sitting on her bed finishing up the bedtime routine and she asks me, “what are you afraid of?” Earlier in the day I had dealt with a spider in the house so she may have been expecting an answer of spiders or sharks or ghosts. But I catch both of us off guard as my answer seems to come from out of nowhere, “I’m afraid of being a bad father to you and your brother.”

The meltdowns had subsided after she started full-day kindergarten, less than two months after her fifth birthday. She’s had her moments, I’ve had mine, too. In those moments and afterward, I repeat my mantra, “fatherhood is forgiveness.”

Just as quickly as I gave my answer, she responds. “You don’t have to be afraid of that,” she says as she gives me a hug to assure me, “you’re the best dad in the whole world.”

Despite the sudden lump in my throat, I thank her and tell her she’s the best daughter in the world. As I leave the room, I repeat my mantra, “fatherhood is forgiveness.” I’m sure I’ll need it again soon.

I needed a replacement because of a birth defect—one I didn’t know about until I was 43 years old. With that diagnosis I was told that “someday” I would have to get the valve replaced. After a scare in July 2021, “someday” turned out to be September 8, 2021. 

I’ve been through life-saving surgery before. I survived cancer in 1997, which included two operations. Despite the major surgery being minimally invasive, it was still scary. In 1997 I was 22. No one was relying on me for anything. I had my whole life ahead of me and not a care in the world… except to beat cancer. 

In 2021, things were different. At 46 years old with an amazing wife, two wonderful kids, and a career that fulfilled me, I had everything to lose. Fear crept into my thoughts too frequently: would my children grow up knowing their father or just stories about him? Would I be just another blip in the cosmos?

Thankfully, the time between prognosis and surgery was short. During that time, I had one major decision to make: artificial or biological valve? Each came with their own risks and benefits. After doing our own due diligence, my wife and I chose the artificial valve. I mean, who doesn’t want to be part cyborg?!

The surgery went well. The recovery sucked. But this story isn’t about that. This story is about the valve.

The amazing thing about the artificial valve is that it clicks when it closes. It opens to let the blood out. Then… click …it closes. When it’s quiet around me, I can hear it. It’s a deep, sensory type of hearing, almost a feeling. 

It’s the most wonderful thing.

click.

It’s a constant reminder to focus on what’s truly important in life.

click.

When the world is still, I can breathe and connect with this.

click.

Whether my mind is racing, raging, distracted, lost in thought…

click.

This is the part of the story where I offer you life-changing advice, isn’t it? Only, I’m not quite sure how to do that.

I can tell you that I often reflect on the fragility of life as I listen to my click. In that fragility, I connect to the vastness of humankind. All the humans that have ever lived and (at least for the near future) ever will live, all contained on this little rock spinning through spacetime, orbiting an unremarkable G-type star in a less fashionable part of the Milky Way Galaxy. In that moment, I feel deeply insignificant.

When I was younger, recovered from cancer and living in NYC, I think I also felt that fragility and insignificance. I reacted differently then. I was reckless and care-free, a consequences-be-damned risk-taker. Maybe I was leaning into life’s insignificance. Maybe I was trying to bury it, hide from it or run from it. Maybe I was just a 20-something in New York. Probably all of the above.

As a father, husband (and 40-something living in the suburbs in Colorado) my perspective is different.

Insignificant to the cosmos? Yes.

Insignificant entirely? No.

Our significance is the impact we make on others, with every click.

Whether with my wife, my children, parents, sisters, extended family or close friends, when I connect with those that I love, I can be significant to them. Even better, that it’s on a consistent basis.

When I contribute something positive to someone’s day, in that moment—in that click—I can be significant for that person. And that person is significant for me. 

In these moments, in these clicks, we are significant to each other. And that gives me meaning and purpose. That reminds me to focus on what’s truly important: the difference I can make in people’s lives, whether fleeting or consistent.

In its simplest, purest form, we can give gratitude to one another. That gratitude creates significance.

click.

It’s not a click that gives my life meaning.

click.

It’s what I do between each one.

click.

You don’t need a click to find meaning in your life.

click.

But a reminder helps. My reminder…

clicks.

What does yours do?

Lack of venture investment does not invalidate your business.

The purpose of a business is to sell goods or services. The purpose is to create something of value that people or companies will give you money for.

The purpose of venture capital is to pour rocket fuel into your business to accelerate your growth. That rocket fuel may cause your business to explode—in the “explode into a million little pieces and leave nothing behind but a smoldering hole in the ground” sense of the word.

That smoldering hole in the ground that contains the ruins of your startup hopes and dreams, is an accepted outcome of the venture capital business model.

Venture capital is a very specific financial instrument. It just so happens to be the one that the media is absolutely obsessed with and covers extensively. Generally speaking, that rocket fuel pairs well with SaaS and other hyper-scalable business models. But not all and not always.

Venture capital does not necessarily validate your business. Lack of venture capital absolutely does not invalidate your business. If and when you choose to take venture capital, remember, it’s just fuel. It has to be the right fuel at the right time for the right machine. And even then, you still have to build a business that serves its customers. 

Listen to the whole episode here:
Startup of the Year Podcast Episode #0054 – Jason Barsema Talks About Changing The Way We Invest With Halo Investing

On this episode of the Startup of the Year Podcast, Frank Gruber talks with Jason Barsema, the Co-founder and President of Halo Investing (haloinvesting.com). Halo is the first multi-issuer technology platform for protective investment solution. Halo was founded in 2015 with a mission to provide access to impactful investment opportunities previously unavailable to most investors and is changing the world of investing by democratizing the protective investment marketplace through transparency and efficiency with the help of technology.

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I’ve heard many stories of inexperienced or predatory investors ruining companies by putting non-standard terms in the term sheet. These startups could raise much-needed capital because the prior investors put in bad terms and refused to give them up.  I’ll give you a few examples.  

Occasionally a corporate investor will try to include a Right of First Refusal, a ROFR, on sale. This unnecessarily limits the exit options of the startup and with venture investors being in the exit business, any reduced optionality is a bad thing.  

In another case, I heard of an angel group that had an overreaching right to approve or deny future investments, and actually prevented a startup from raising much-needed capital. 

In both cases these were materially different clauses from a typical Right of First Refusal, which usually has to do with common stock sales.

Another case I heard recently was an investor asking for a discount on the next round of financing, which is ridiculous. 

The expectation is that every investor puts money in on the same terms in the same round. The next round gets negotiated separately. 

There are more insidious terms to avoid, too many subtleties to list here. The single best piece of advice I can offer you is to hire a law firm with experience writing startup term sheets. This is NOT your cousin that just got his JD nor is it your aunt who has practiced real estate law for 30 years. Neither are qualified to represent you in a financing round. 

Find a good startup law firm. It doesn’t have to be a big national name like Cooley or Wilson Sonsini. The startup practice at Michael Best in the Midwest is stellar, as are many local law firms. Ask around to the startups in your community for a good startup law firm, and avoid these major pitfalls that will sink your company if you don’t.

Listen to the whole episode here:
Startup of the Year Podcast – #0053 – How Startup Founders Should Pitch a TechCrunch Reporter with Natasha Mascarenhas

On this episode of the Startup of the Year Podcast, we hear an interview from our 2020 Summit, when our Director of Strategic Operations, John Guidos, talked with Natasha Mascarenhas, a reporter at TechCrunch. Natasha covers seed and early stage founders, as well as the networks they take to get their first check. She also focuses on education amid COVID-19. Before TechCrunch, she was at the Boston Globe, the San Francisco Chronicle, and Crunchbase News.

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It may seem to you that after spending the last 30 to 60 minutes pitching your business to a venture fund that you obviously want them to invest in you. It may not be obvious. 

I heard of a case last week where a startup nearly missed out on getting a lead because the fund didn’t think the startup was keen working with them. 

I’ll share with you a story I heard somewhere along the way in my sales career. A local guy was running for a local political office. He ran a good campaign but lost. Afterwards he’s talking to his neighbor and as he’s bemoaning the loss he says, well at least you voted for me. The neighbor looks down sheepishly and says, well the other candidate asked me to vote for her and you never asked me to vote for you.

How are you going to get the sale if you don’t ask for the close? How are you going to get the investment if you don’t ask for it? 

Tie it in with why they’re a good fit for you. It can be as simple as, we think you’re a great fit for our business because of your investment in XYZ and your expertise in marketplaces. We’d like to have you involved and welcome your investment. What are the next steps in your process? 

Listen to the whole episode here:
Startup of the Year Podcast #0052 – Dave Dworschak of Kamana Explains How to Build a Startup For Acquisition

On this episode of the Startup of the Year Podcast, Frank Gruber talks with Dave Dworschak, the Co-founder and CEO of Kamana (www.kamanahealth.com), about their recent acquisition by Triage Staffing in 2020.

Kamana is an alumni of the Startup of the Year program and was an Established Ventures portfolio company. More specifically, Kamana is is customer-centric, feedback-driven software for the healthcare staffing industry and it enables the healthcare workforce to manage their credentials and careers from a single place, and staffing agencies to hire and collaborate with the workforce far more efficiently.

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I’m not talking about your direct competitors in your industry. I’m talking about the half a dozen or so other startups I have in my diligence process at the same time as you. When it comes to securing a commitment, that may also be your competition. 

You’re not necessarily going to lose out on an investment just because a VC has a lot in their pipeline. But like you, we only have 24 hours in the day and only so many hours that we can spend working, so we want to always be sure we’re working on the funding rounds that are the highest priority for us. In other words, we’re constantly ranking companies internally to reprioritize and refocus our efforts. 

If you’re getting the SHITS from an investor it may be that they have a backlog of diligence and you’re somewhere in the middle of the stack. The danger is that the longer you stay in the middle of the pack, the more likely you are to move down or possibly never hear back. 

You benefit from staying top-of-mind with your potential investors. You can do this by sharing updates. Updates about your round, for example, that you got a commitment from another firm. Or sharing wins such as, you just landed a new client or that new hire came on full-time.

Keep the communication flowing. If enough has changed since you last spoke, offer to set a 15-minute update call. And don’t be afraid to ask questions about where that fund is in their diligence process on you. 

Keep your investor process moving forward because when it stalls, it dies.

Listen to the whole episode here:
Startup of the Year Podcast Episode #0051 – Tim Draper Tells Stories From His Life As A Venture Capitalist – Startup of the Year Podcast

On this episode of the Startup of the Year Podcast, we listen to Frank Gruber’s interview with Tim Draper at the Startup of the Year Summit in the fall of 2020. Tim is a top global venture capitalist, founder of Draper Associates, DFJ and the Draper Venture Network, a global network of venture capital funds.

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Nothing like potty humor to get your attention. In all seriousness, SHITS is an acronym I heard along the way that perfectly describes the VC slow roll. It stands for Show High Interest Then Stall. This is a legitimate venture capital strategy, even if unintended. It’s less effective in coastal fast-close environments, but still happens with great frequency throughout the country. 

The rationale behind this, from the VC perspective, is that before I write a check time is my ally. As soon as I write a check, time is my enemy. The longer I’m on the sidelines the more information I get: the more I learn about you, your company, competitors, traction, and team. I may be genuinely  interested but if there is no immediate need to commit to a round, I’m going to sit on the sidelines, and wait, and watch. 

When an investor has conviction they will give you a firm no, a firm yes, or even a conditional yes, such as “as long as we can hit our ownership percentage, we’re in whenever you get a lead.”

Unfortunately, the most likely scenario and one you may be accustomed to getting is the SHITS. This is not the mark of a bad investor, just one that lacks conviction about your opportunity. You can’t force conviction, but you can drive action. 

You can drive action to a decision in a few ways. First you can ask direct questions about what it takes to get to a “yes.” Next you can show additional interest in the round—and I’ve talked about this in previous episodes. When a round is coming together I need to know if I’m going to get off the sidelines and get in the game, or pass altogether. And finally, you can drive action through deadlines. There’s nothing like a deadline to get people to take action—on anything.

When you have enough interest, including from VCs giving you the SHITS, set a deadline and start pulling the round together.

Listen to the whole episode here:
Startup of the Year Podcast Episode #0050 – Meredith Fineman Teaches Us How To Brag Better

On this episode of the Startup of the Year Podcast, we listen to Frank Gruber’s interview with Meredith Fineman at the Startup of the Year Summit in the fall of 2020. Meredith is an entrepreneur, writer, best-selling author, speaker, podcast host, and women’s advocate. She is also the founder and CEO of FinePoint, a leadership and professional development company with a focus on visibility and voice.

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After the dust settled on the first few months of quarantine it looked like the economy was not going to collapse, but we were in for a long haul. What was perhaps worse was the prospect of that “long haul” being for an indeterminate period. During this time I saw the convergence of three major factors in the startup ecosystem that had me worried. They were:

1. More seed funds + more seed dollars = more companies at the seed stage
2. Series A raising the bar = harder to raise the next round
3. Private Equity raising the bar = harder to get an early exit

To me, that all added up to a huge fundraising bottleneck in everything leading up to Series A. In the second half of that post I offered advice to founders on how they can keep their business afloat until things settled out.

What happened over the next few months was more like a feeding frenzy and nothing at all like a crunch. At SpringTime we saw coastal funds get comfortable investing via Zoom and thus widening their aperture to include startups all over the country. That made funding rounds even more competitive than they had ever been, at all early stage levels.

But the big thing that I got wrong was this:

This is the Capital Overhang. Capital overhang is the amount of money raised by private capital funds that remains uncalled. Meaning, there is more money yet to be invested in the private sector than ever before.

With more money in the market, and with investors knowing they have more money yet to deploy, there was no bottleneck.

By June 2020 when I wrote that post, I thought I had seen enough of the trend ahead to call the shot. In October as startup investing was in peak frenzy mode, I was wondering what I got wrong. When I saw this chart earlier in the year, I knew what it was.

One startup in our portfolio I know heeded the advice I offered and focused on making it through the year on a slimmer budget than they anticipated. It turned out to be the best year yet for them, and they put themselves back on the right track. For others, they took advantage of the capital markets and pushed to raise another round. But for most, it really was business as usual, just via Zoom.

I’ve started asking founders, “where do you see your company in five years?” The answer I hate to hear is: “we’ll have an exit by then.”

OK hold on. You and I both know that I have a fiscal responsibility to my investors to return multiples of their capital, and that I do this by having liquidity events from my investments. If you think that telling me you’ll sell the business in five years is what I want to hear, you’ve got it wrong. It actually throws up two major red flags.

First, entrepreneurship is hard. Really, really hard. If you are only in this for the money then you’re not going to have the grit to push through all unforeseen gut-wrenching, keep-you-up-at-night problems that will come your way. There are dozens of studies that show money is not a prime motivator. If you’re only in this for the money, then you don’t have enough motivation to get through the hardships.

Second, while it’s true that I am looking for exits, what I’m actually looking for are return-the-fund exits. I’m not looking for a dozen companies to return 2-3x, I’m looking for one company to return the whole fund—and then some.

Here’s some quick math: if I have a $20MM fund and I own 2% of your company on a fully diluted basis at exit, that exit needs to be $1 billion dollars to return $20MM. That’s the kind of exit I’m looking for (Actually, I’m looking for more than that, but we can geek out on fund economics later.)

Are you going to get to $1B in five years if getting an exit is your primary motivation? Hell no. You’re going to take the first $50MM private equity offer that comes your way, because you’ll get a few million dollars, which will be amazing for you and I’ll be incredibly happy for you. I just don’t want to invest in that.

I want to back founders that want to change the world, not cash their chips in.

Listen to the whole episode here:
Startup of the Year Podcast Episode #0048 – Dr. Ximena Hartstock Discusses Ideas That Change The World

Ximena is the Co-founder of Phone2Action, the world’s leading technology company for civic participation and stakeholder engagement. The platform has empowered millions of advocates to make over 40 million connections with elected officials. She is passionate about education and about empowering people to take action to make this world a better place. In addition to running her own companies, Ximena is a member of the board of directors of Consumer Technology Association which produces CES and she is also on the Forbes list of Women Crushing it in Technology.

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I talked to a founder the other day who was frustrated by being continually told he was too early. It’s especially frustrating when you know the people you’re hearing this from actively invest in companies at your stage. But an investor saying, “you’re too early” is not the whole story. 

There are of course cases where you are actually too early. You can vet this quickly with an investor by asking direct questions early in the meeting, such as “Do you invest pre-revenue?” “Do you invest at my stage?” And, “what do you look for in companies at my level?” With those questions you’ll know if you are actually too early, and even better you’ll know what you need to talk to in your presentation. 

When you are talking to an investor that writes checks at your level and they’re telling you that you’re too early, here’s the real problem: you haven’t sold them on your vision. 

Mike Maples from Floodgate says that great founders are time travelers. I love this. I’m going to paraphrase his explanation and riff on it a bit: You need to come from the future and tell the present day investor what the world is like with your product at full scale. How have you changed people’s lives? And as importantly, what are the inflection points that bring your future into existence. 

When you sell the vision you’ll have an investor who wants to bring that world into existence with you. Even if you are technically too early, you’ll have a strong lead for your next round. The earlier you are, the stronger you need to sell the vision. Even with traction, you still need to sell the vision.

Take a minute, time travel to the future, look at the world and tell me what it’s like. 

Listen to the whole episode here:
Startup of the Year Podcast Episode #0047 – Suneel Gupta Explains How To Be “BACKABLE”

On this episode of the Startup of the Year Podcast, Frank Gruber talked with Suneel Gupta at the Startup of the Year Summit in the fall of 2020. Suneel teaches innovation at Harvard University and is the author of the upcoming book, “BACKABLE,” which just came out on February 23rd. The book is rooted in Suneel’s journey from first-time entrepreneur to being named “The New Face of Innovation” by the New York Stock Exchange, and explores how to get people to believe in your ideas.

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