Tips for coping when your startup is out of cash

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My company is running out of money again. Well, really, it already happened. But it's happened so many times that I am sort of used to it. It’s a routine. You may recall that part of the routine is not paying my electric bill. But there is more.

1. Focus on something you can control.
You might have noticed that my blog posts are very frequent right now. It's a way to cope with the funding drama. I have so much control over my blog. And if I obsess over the traffic statistics then I have that crack-head feeling of immediate feedback, and it feels good, and even if half the people are telling me how much they hate me: Traffic is traffic.

Another part of the out-of-funding routine is fighting with Ryan. When I am totally focused on running the company, and I'm not worried about payroll, then things go smoothly and Ryan and I have great conversations about the future of social media and the future of resumes and where we fit.

When we run out of money, Ryan and I focus on our cycle of miscommunication: I say something rude that I don't know is rude. Ryan gets defensive because he isn't able to say, “That's rude. Please don't talk like that.” I have no idea why he is defensive, he just sounds like he's up in arms about nothing to me, because if I knew I had been rude in the first place, I would not have been, so of course I don't know. And when he is up in arms, I yell back. And then he says that I am impossible to deal with because I'm rude and I yell. Read more

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6 Tips for being a CEO without ruining your kids' lives. I hope.

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I get questions all the time about how I manage having kids and a startup at the same time. After trying to answer the question a few times, I realized that there’s the pretty-much-BS answer about how it’s all about being clear on your values. Or there's the complicated, too-long-for-interviews answer.

To really get tips for being a CEO with young kids, you’d have to hang out with me for a day. Like, last Tuesday. Which was just another day of being a parent and running a startup. Except this day starts at midnight. When I decide that I am not going to go to sleep because I have to get up at 3:30 a.m. to drive to Milwaukee to catch a plane to Atlanta at 7 a.m. And here's the first tip:

1. Get sleep. The kind that is not warm and sweet.
I decide I'll stay up late and work but what I find is that I'm mostly eating. First coffee. Then coffee doused in sugar. Then peanut butter and jelly sandwiches, which I covet each morning I make them for school lunches. But normally I restrain myself.

I see now I'm too stressed for normal restraint, so I go to bed.

My three-year-old is in my bed. If I get in, he will snuggle and whisper “I love you” in his sleep. But when I get up to go to the airport, he'll have a fit, because what kid wouldn't hate to wake to his mom leaving his house in the middle of the night?

To shield my son from childhood trauma I take him out of my bed and put him in bed with my ex husband, who is sleeping in the bedroom down the hall so that I can leave on business trips.

2. Be great at business travel. But get out of it whenever you can.
I set the Blackberry for 3:30 a.m. And when it wakes me I feel like I slept for ten seconds. But this crappy itinerary was my idea. Because I was so excited to go in and out in one day and not have to stay in a hotel. Read more

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Starting a company in Silicon Valley is stupid

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One of the reasons I moved from New York City to Madison, WI is that I knew I would start another company. I wasn’t sure what it would be, but I had already launched two startups, and I could feel another one coming. It’s a sort of itch I get when I have too many ideas piling up in my head: I think to myself, “One of these must be good for something.”

People ask me how I picked Wisconsin. The bottom line is that I wanted to be able to support my family and take the wild risks that come with having a startup. Supporting a family in NYC or Silicon Valley is insanely expensive especially for someone who has no cushion to fall back on during the months when funding is tight. (Which is a major reason you see lots of Silicon Valley startups from twentysomething men with no expenses and few startups from women with kids, and heated discussion on TechCrunch about salaries for founders who can’t make ends meet.)

So, here are some things to think about when you know you are going to do a startup, and you know you are going to move.

1. The first stage of a startup is constipation, which can happen anywhere.
The beginning of a company is slow and meandering. You have pretty much no idea what the company is or what you are doing with it, or if you even picked the right partner to do it with. You sit in a room and argue for a while. And you throw in the towel ten times. And then go get it and try again. You develop a bunch of revenue models that are either so lackluster that they are not worth your time, or so outstandingly huge that they are not believable.

During this time, it does not matter where you live. You are not hiring. You are not pitching your business because you don’t have a pitch. And you are probably not spending much money because you know the near future does not include a lot of money coming in. Read more

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Get your next mentor by being slightly annoying

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Brian Wiegand is a very low-profile guy who has sold three companies, most recently to Microsoft. He is big enough that TechCrunch writes about him as a good bet for anyone betting. But the bane of Brian's existence is that his exits have all been for under $50 million.

This is enough for him to have a private jet and be King of Madison (Wisconsin), but not enough for him to get a lot of respect in Silicon Valley. A quote from my advisory board member who lives in Silicon Valley: “For big VCs, $50 million is a rounding error.”

So Brian is not looking for people to mentor or boards to sit on because he is consumed with running his fourth company, Alice.com, which will compete with Wal-Mart and Target.

I do not tell Brian that I will have a hard time ever missing a trip to Target to shop at Alice because Target has such great clothes that are so cheap they are almost free.

Well, actually I did tell him that. And I told him a bunch of other stuff, because I decided that I need him as a mentor. Eventually, I got him to agree to be on the board of my company. Here's the process I took to convince him to help me. And these are good steps for anytime you have someone you'd like to ask to be your mentor: Read more

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For a startup, money doesn’t solve problems, it just changes them

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We finally locked up funding for my company. There are some catches, though, and one of them is that we can't use the funding to pay back debt.

This is a problem because our company has been out of money, pretty much, since November. We have revenue, but not enough to cover operating expenses. So we've all given up a portion of our salary for a while now. And we stopped paying rent. And we didn't pay freelancers, (which meant that for the past months, any time something broke, it was very high stakes because we couldn’t hire someone to fix it.)

The lack of money got so bad that one day I was driving to Chicago to meet an investor but the company credit card (which is really Ryan Healy's credit card) was declined. And I didn't have money for gas. So I had to drive back to the Brazen Careerist office and get money from Ryan Paugh, who is the only person in the company who has any sort of financial cushion in his life. But he only had $20, which is not enough to get to Chicago, so the investor had to meet me in Milwaukee. And buy me lunch.

The no-money thing has also been stressful at home. At first I cut back on stuff that was not a good idea. Like, cut back on the vet for our two new kittens, and then it turns out they are not that new, at least to the world, because one got the other pregnant. And now it's really expensive because we have to have a cat abortion. Read more

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8 Blogs I read when I’m stressed about funding my company

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People ask me all the time, “What blogs do you read?” The answer is that I read different ones at different times. It’s a mood thing, I think. I could give you my favorite blogs for finding cool research, or my favorite blogs from my friends, or my favorite fashion blogs for when I don’t know how to wear a pair of shoes I love. But the list I’m going to do today is the list of blogs I read when I get frustrated that running a company is so hard.

ValleyWag
Oh, I love Owen Thomas. He has a knack for making anything in Silicon Valley look totally stupid. And he is so sharp, that when I am feeling totally stupid, he can actually make me believe that I’m not alone. Art Spiegelman elevated the comic book format by using it to talk about the Holocaust. Owen Thomas elevates the gossip rag format by using it to tell people how to run a business.

TechCrunch
You know what? I hate reading this blog because it’s like a frat party but they forgot the beer and the girls. Still, I know that part of feeling like a competent entrepreneur is knowing what’s going on in the community. Plus, who can begrudge Michael Arrington kudos for making the most boring topic in the world — big egos taking down big egos — funny and interesting? Read more

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7 Things to consider before launching a startup

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My company is out of money, which you are never supposed let happen. And definitely never supposed to confess to. Because then investors can give you any terms they want. Rape. Carnage. Pillage. Everything. And in our case, it’s coming from the angels who invested in our first round of funding, which means that the people who are supposed to be on our side are killing us.

So two days before Christmas, I am going nuts, trying to close a bridge financing from the angel investors who funded us initially. Which means that these guys are very rich, and traveling for Christmas, and totally not interested in being bothered with the minutia of our depleted finances.

I’m desperate. We’ve already skipped one payroll, and it’s hard to think of a worse time to do that than the week before Christmas.

When 70% of young people say they want to run their own business, they are probably not thinking they will fund their business themselves. Since they probably have no money. So they are looking at taking in investors. But I’m not sure that 70% of young people want to take in angel investors, because here’s what it looks like:

1. You are on the phone all the time.
Tuesday before Christmas: I am glued to my phone: Investors don’t work on a schedule. They are millionaires. They are trying to sail their boat in Bermuda but they live in Wisconsin which means they have to make ten connecting flights from snowbound airports, and my chances of catching them between flights are slim. So I spend my day waiting for someone to call in with another clever idea for taking more equity from the company and redistributing it to the investors.

2. You’re always sick, but not take-a-day-off-work sick
And I have pinkeye. It started on Monday, when 20/20 was in our office to do a story on salary. Yep. That’s right. The company that is not paying salaries right now is featured on 20/20 as the poster child for transparent salaries.

The camera is right in my face while I’m talking about how the only people who benefit from hidden salaries are managers who made hiring mistakes and don’t want to fix them. “Management should not hide behind their weaknesses,” I say. And then I say, “Do you have something in that camera that can fix my pink eye?” Read more

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Startups are still fulfilling, even though getting funding in a recession stinks

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I can always tell when things are really falling apart for me by how many days in a row I wear the same outfit. Last week, I wore my I’m-a-successful-CEO outfit four days in a row. In case you need a visual, it is black all over with ruffle near the neck — a little bit girly and hides dirt well.

You will be interested to know that four days included one plane trip, meetings with six investors, and one date (I smelled the shirt right beforehand and it seemed okay. I didn’t think he’d be getting that close anyway.)

The last day was when I was really sure I was going to change outfits. I had an interview with Elizabeth Vargas for 20/20. I packed a huge suitcase full of everything that might look good on TV and I told myself that I’d figure out what to wear the morning of the interview. But the morning of the interview I was actually crying to my attorney about how complicated our second round of funding is becoming, and I told him that I was going to quit the company and get a job writing for a local newspaper. I really said that.

Forget the fact that local newspapers really are not hiring writers. Really. I think I was just saying it to him so he could understand how totally stressful it is raising money in this financial environment. Plus, it’s totally not cool to be admitting to such huge stress levels when you are the CEO. I mean, who wants to fund a company when the CEO is having a mental breakdown? But really, every CEO who is raising money right now is staying up all night worrying. And not telling anyone.

Well, except me. I am telling my attorney. And now you. Read more

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Work stuff that makes me happy

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It’s a season of joy, right? You are probably thinking that you can count on my blog posts to be a respite from seasonal joy. But still, I’m susceptible to peer pressure. Mostly because I think it’s an obligation of a friend to be sort of cheery. Because cheeriness is contagious. And on some level, I want to be your friend.

I have always thought a good mood is contagious, but now there’s more proof, in a study published last week in the British Medical Journal, (and in the Los Angeles Times, for those of us who like our research sliced in candy-sized bites.) The researchers followed 5000 people for decades and found that if you hang out with people who say they are happy then you are more likely to report that you are happy, too.

This might be a peer pressure thing, except it’s really a moot point. Because if you say you are happy, you get all the health benefits of being happy (image hosting). And, of course, those benefits are huge. It doesn’t really matter that it is irrational to be happy—you will mentally and physically in better shape if you go down that irrational path.

So even though I tend to choose rational discourse over cheery conversation, today we can have both. Here are three places where I found happiness and work intersecting.

Read more

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Live call today, 3 P.M. Eastern time

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I will be on a live call today with Guy Kawasaki and John Jantsch. You can sign up to be on the call here.

John is the force behind the Duct Tape Marketing blog, which is a great example of how to use a blog to grow a whole business. Today, his blog looks like an empire.

Guy Kawasaki has a very popular blog that I link to a lot, and he’s author of a bunch of books about entrepreneurship, one of which we are talking about on this call: Reality Check: The Irreverent Guide to Outsmarting, Outmanaging, and Outmarketing Your Competition.

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