II. Introduction – Angel in hell

I knew that if I failed I wouldn’t regret that,

But I knew the one thing I might regret is not trying.

– Jeff Bezos, Amazon Founder and CEO

The idea of starting your own business is extremely appealing. I don’t know of too many other things that can so consume our minds and motivate us so strongly. However, not many people realize what awaits them at the beginning of their journey to create their startup. Few know that the moment we launch our own company we take the first steps into the depths of the Valley of Death. This is what is called that time of the startup’s operation, when we already have costs, but the road to the point where revenues cover them and the company can sustain itself is still a long way off. Many people think they will smoothly get through the Valley of Death by quickly generating revenue, but in my experience, most never get out of it.

The greater our ambitions and plans, the deeper we go into this valley and the more tortuous road ahead of us. The first prototypes and products don’t work out, the marketing of the product is harder than we thought, the salespeople don’t sell as much and as fast as we planed, the competition turns out to be stronger than anticipated, and it turns out that we hired the wrong people, so we start more recruitment processes all the time. Everything costs money more than we budgeted, revenues are less than projected, and work is taking much longer than expected. Sound like a nightmare? It’s just a scenario that comes true for most startups.

In the beginning, we also need higher funding to reach our goal and overcome all the mentioned difficulties. So, we are acquiring the first business angels, who (we hope) will lead us through the darkness of the Valley of Death in the right direction. This, however, is not enough. We reach out to venture capital funds and further develop our startup, not realizing that raising money from funds means entering even deeper into the Valley of Death. It’s not just that as we raise additional money, we start spending it and our costs again rise faster than revenues. Unlike most investors, VC funds can tempt us with their funds, experience and contacts, but they can also set many traps for us deep in the Valley of Death. For this, by the way, we don’t need funds without experience we will pull these traps on ourselves.

However, I have learned from my own example that the deeper the we enter this valley, the potentially greater and more satisfying reward will be waiting for us on the other side provided that we manage to come out of this journey unscathed. That’s why I want to give you a tool for raising millions of dollars from investors, but also prepare you for the potential pitfalls.

I don’t want your startups to be swallowed up by the Valley of Death and join the mausoleum of companies. I want you to achieve success however you define it for yourself. Who knows, maybe someday you too will become business angels and help others walk this tortuous, dangerous path of an entrepreneur.