What to do when you run out of startup money

Dane Atkinson
Dane Atkinson

By Dennis Clemente

What to do when you run out of startup money?

Find ways to pivot, according to Dane Atkinson, CEO of SumAll and lawyer Randolph Adler, Jr., the special guests last October 4 at The Hatchery meetup at the American Management Association building near Times Square.

“If you want to save your startup, give your problems some distance. If your story is not working, take the weekend off, step back, come back to face your demons and challenges, or pivot,” Atkinson said.

Every CEO makes mistakes. Atkinson was never more empathic than the relationship between CEOs and employees where the problems may actually lie. “People who work for you are your employees. Ask them to do work and that they have serious obligations to adhere to.”

“Ask for help. Your customers are an amazing lifeline. 9 out of 10 people will help you,” he added.

If all else fails, Atkinson suggested how it is easier to start a new concept. (Don’t) feel like you’re giving up on yourself. Even if you have failed, they (VCs) can still fund you next time.

Adler, for his part, thinks being honest about yourself is key. “If you’re running out of money, shut it down. If you have debt, (realize) there are angel investors who may want to ‘collaterize debt.”

Atkinson and Adler just hope the experience serves as a learning lesson when you pivot or start another idea.

In the casual fireside talk, Atkinson said, “VCs (venture capitalists) are predicated on compression of time. So work your a—off if you’re a startup.”

Randolph Adler
Randolph Adler

All investors want something that can change the world.

Taking off from there, Adler said VCs have bosses who want ROI. So in the beginning you’ll have to put yourself in the shoes of the VC and ask some tough questions, “If you are a VC, would you invest in your company?”

Adler called also for some perspective. ”We see the success story but not the others who have failed. You may need a gut check.”

As Atkinson talked about how much VCs fund startups, Adler told the audience what could be the most insightful tip in their talk. “What do these figures tell us? Nobody knows the value of a company or how much one is worth.”

It may also be the reason why, when a startup fails, it is still a surprise for some people. “Consider VCs not as a guiding force but as part of the environment,” Atkinson concluded.

If you want to get funded in your next idea, Atkinson hopes it’s not a lifestyle business. “No investor will touch a lifestyle business.”

Atkinson is a co-founder of SumAll. Previously he has served as CEO Squarespace and CEO Sensenet. He’s a serial entrepreneur having founded 6 startups over the course of his career, achieving five exits. He also is an advisor/ investor and board member to a dozen more companies.

Adler is managing partner and co-founder of RK Adler LLP. Adler represents technology, new media, fashion and other similarly situated startup, ventured-based, emerging companies at all stages of development.

The meetup was hosted by Yao Hui Huang.

Value or vibe, what is a startup culture and what does it take to build one?

By Dennis Clemente

A pingpong table does not a startup culture make, as six distinguished panelists can attest to at the meetup, “How to build a startup culture” last September 17 at the Orrick offices at CBS building.

The panelists were Dane Atkinson, CEO, SumAll; Wiley Cerilli, former CEO of SinglePlatform, Current VP of Constant Contact; Mark Peter Davis, managing partner, Interplay Ventures; Allyson Downey, co-founder & CEO, weeSpringZain Jaffer, CEO, Vungle; and Joaquin Roca, consultant & COO, Venwise.

How do you build the culture you want throughout the life of your company?

For Roa, it’s about “knowing your culture is connected to your business strategy and how you must all be together in knowing how to win your market.” He insisted on having “core values that rarely change” right from the start. For Downey, an ideal startup culture is about having “some radical transparency.”

Cerilli, who probably has more staff than all the panelists with more than 120, agrees. “Hire people brutally honest with you and have a no-a–hole policy.”

Creating and preserving your startup culture requires some honest assessments. Cerilli likes to give leeway when it comes to off-hours camaraderie.

“As you get bigger, not everyone likes going out for drinks. People have different ways of celebrating,” he said, in response to how some startups think: “You must work together if you look at someone and think you can drink with him.”

As for how people choose a startup culture, Jaffer, who has about 40 staffers, responded to how people sense it, intuitively. “Culture is about unspoken things.”

When it comes to hiring people, Cerilli said he doesn’t do interviews anymore but at one point in time, he said a person who often said “I” instead of “we” and those who mentioned their previous bosses (in an unflattering light most likely) are big no-nos.

For Davis, it’s crucial that he gets people who think in terms of being a partner than just an employee. “If you feel you can’t deliver bad news, that’s a boss-employee relationship, not a boss-partner relationship.”

In terms of talent, Jaffer said he likes “hiring people smarter than me” whereas Atkinson puts a high premium on “trust” and, borrowing from Cerilli’s management style, having a push-up drop-down policy for those who think they’re getting “pudgy.”

“We ask if a someone had a bad day for three successive days,” Atkinson said. This way they can respond accordingly and do their best to help.

For Roa, diversity is the most important thing. “Ask yourself what you are missing in your team, because oftentimes we like people who like us. And if we’re white and we only have white men, that’s not good. A diverse team sees things wholistically.”

In Downey’s case where she and her husband are co-founders, they try to be honest about what the other half can’t do—and that includes knowing how to balance work-life balance and a virtual workforce. “If you can’t do (the latter), you’re doing it wrong.”

But how do they communicate culture? For Davis, he likes to “drop the F bomb” and see how his interviewee reacts. “It’s all about show and tell.”

Jaffer went for a more measured approach. “We do anonymous surveys,” especially for those exiting the company, because they’re more honest. Cerilli likes how people communicate Wow moments on a wall at his company’s office.

But how do they handle a problematic employee?

Davis said you don’t want to be last person to find out if there’s a problematic employee, because it can affect your bottom line. He said he has given someone another change, but when things didn’t change, he went by “addition by subtraction,” as he noticed the company and staff became more productive. “We just had to let this person go.”

Jaffer likes to ask himself, “I ask “Is it my fault? Did I give this person an opportunity to succeed. If we didn’t, everybody is accountable. You have to give this person a chance.”

The meetup was hosted by David Concannon, a partner at Orrick.