The Dark Side of Entrepreneurship No One Talks About

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The Dark Side of Entrepreneurship No

One Talks About
Vani Kola, 3 Dec 02 mins read 390
4-5 minutes

Entrepreneurship shares so many commonalities with sports. Both

revolve around raw ambition and the determination required to
overcome obstacles. Both create superstars who may bring with
them extraordinary adulation, fame, and wealth.

While in sports we have superstars such as Virat Kohli, Roger

Federer, Lionel Messi, or Sania Mirza, in entrepreneurship there
are superstars such as Sachin and Binny Bansal (Flipkart), Anthony
Tang (Grab), Vijay Shekhar Sharma (Paytm), or Daniel Ek (Spotify).

It is painful to watch the collapse of a dream, but it’s equally painful

to watch an entrepreneur who does not know when to quit.

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But for every success story, there are many more that don’t get to
the finish line. These are the stories that are hidden under the
carpet of glory. And while we celebrate the successes of startups,
what we often don’t talk about is the darkness, the agony, and
sheer pain that lie behind successes and, tellingly, failures. Yet, we
should. Do athletes know when it’s time to leave the sporting
stage? And do entrepreneurs know when to quit?

Over the years that I have been closely associated with the startup
world, I have come across many instances where I have realized
that founders have not known when to quit, and that is one thing
that leads to the downfall.

In one such instance, we had invested in a startup where the

founder reached a stage where he was running out of money.
However, he wasn’t willing to back out. Selling the company was
not an option for him, even though unsettled dues were mounting.
Like many entrepreneurs in his position, he was hoping that there
will be a way to revive the company and that capital would flow in at
some point.

It is painful to watch the collapse of a dream, but it’s equally painful

to watch an entrepreneur who does not know when to quit. I have

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seen founders struggle with the idea of quitting or holding on to

blind hope for as long as five years!

My advice as an investor is simple: Cash in the bank = All liabilities

+ two months of salary to employees.

Always manage your net burn in such a way that you can pay your
dues. Entrepreneurship is a lot about perseverance and
overcoming the fear of failure, and those are valuable assets to
have as part of the entrepreneur mindset. Entrepreneurship is
about passion and innovation. But it is also about understanding
the repercussions of bad luck, wrong choices, and weak
economies.

How to Know If (And When) You Should Quit

Your Startup

While financial stressors are one way of knowing when to quit, the
reality is that founders can become emotionally very attached to the
company. If the business isn’t taking off, it can be difficult to
understand the difference between how soon is too soon, and how
late is too late to quit.

Entrepreneurs need to know that it may be time to quit:

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If they are not able to meet their projections for six months

If they are consistently deferring the deadline for product delivery

If they are not able to pay employees their salaries for two months

If they are not able to raise funding to keep the company afloat

If the cost of running the company is taking a heavy toll on their

personal well-being

Some people equate quitting with failure, especially entrepreneurs.

This might be uncomfortable, but the reality of failure is one that all
founders should be prepared for from the outset. Quitting is not a
sign of weakness. Therefore, knowing when to quit can become a
win too. Perseverance and tenacity are only parts of the story. If
you don’t quit, you are only deferring the inevitable and not facing
the truth—that part of entrepreneurship that shines the light on self-
learning, growth, and self-realization. Facing this truth needs to be
equally relevant.

Success and wealth. Risks and failure. Dreams and nightmares.

Stability and chaos. When you’re starting out, know that not all
entrepreneurs make it to the front page of the newspaper. But that
doesn’t mean they were failures. The key is to understand the value
of timing, of knowing when to quit so you can cut losses, take what

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you learned, and move forward.

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