Professional Documents
Culture Documents
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I’ve said it time and time again: Entrepreneurship is hard and it’s not for everyone. If, after
taking a realistic personal inventory of who you are and what you want to be doing, it turns out
that you are ready to take the next steps in starting a business, I want to discuss the advice I
always give to first-time entrepreneurs.
Cash is oxygen. How much money do you have to stay afloat and for how long? Do you have
one year’s worth of rent and overhead? First-time entrepreneurs always make this mistake and
it’s my biggest concern for them. You have to make sure your actions can respond to the
bleeding of cash that occurs before you even turn a profit.
I often see first-time entrepreneurs making one of two mistakes at the start:
(1) They do not have a funded business and haven’t raised venture capital (or any other capital).
They only have six months worth of money to make their business goal come true. While they
dream up every perfect scenario that will allow them to achieve their dream, by the third day of
being “entrepreneurs,” the realization hits that nothing goes perfectly and they run out of cash.
(2) They are so well funded that they don’t build up the necessary muscle to generate revenue.
They are so used to the idea that losing $150,000 in burn rate is “fine” because they have a
funded company. Most of their attention and behavior is focused on raising their next round
instead of building an actual, profitable business.
No matter the situation, starting a new business, particularly one that requires an upfront
financial investment and not just your time, drains money. You need to understand financially
what it takes in order to pay for necessities like rent, supplies, and inventory (and that doesn’t
even include your personal expenses). A high level of practicality is necessary for success.
PS: This may just be words for you on a screen right now, but I beg you to read this very
carefully. Read it and make sure it sinks in. We are absolutely living through the greatest
generation of fake entrepreneurship that we’ve seen in a long time. Unfortunately, many people
will be hurt both financially and emotionally because of this era. I implore you to take these
words seriously.