Why Chris Sacca is Awesome

So, last week I went out to lunch with a small group of Georgetown students and Chris Sacca was there to chat and give us free advice (free! advice! from Chris Sacca!) and some of the things he said really struck me as being a true evolution in the minds of venture capitalists, and one that I think is 1)necessary and 2)welcome and 3)awesome.  The message was a recognition that for many founders, although our company is ‘our baby’ and we sacrificed thousands of hours, months/years, possibly relationships, the overriding concern is money.  Too often, entrepreneurs sell out or give up at precisely the wrong moment. I could make up a bunch of reasons why this is, but let’s be real here, it’s about the money.

But not in the way most people think. We are not just money-loving bastards, wanting to make a buck.

On our own startup, givto, there have been ups and downs. At one point, one of our founders had to literally ask for money from his parents. And his friends. And wasn’t eating, or sleeping, ever. We all have debt, and I don’t mean $4 and change, but literal mountains of student loans to pay. Plus the debts we’ve taken on for the company. Plus our housing, cars, and food. Although Giv.to is now profitable, no one is living large. There have been definite sacrifices in time, in money, in relationships, in “fun” for the company over the last year and half. Sometimes, it feels we are snailing our way down an endless road to nowhere.

But we did all of that because we love Givto, and we have a vision and purpose and we believe in it. That being said, if someone offered to buy us for $2 million dollars tomorrow, would we (could we) refuse?  I don’t know. For Mike and Adam, it’s been a definite struggle to find talent and resources. For me, having another job and doing an MBA and doing a start up leaves me little time for other important things, like seeing my family. Or sleep. Our other partner, Michelle, is in law school full time and could definitely use the money.

I know many start ups are in similar or worse positions – strapped for cash, exhausted, but elated they’ve made something from nothing, thrilled that someone (anyone) else thinks it’s a great product. Unless they were born millionaires, every founder is faced with the inevitable choices of giving up, selling out, or holding on for just one more day.

This is why I think Chris Sacca’s viewpoint on giving founders smaller amounts of money to “tide them over”, and/or buy a small amount of their shares for immediate cash, is a fantastic idea. For a relatively small amount (say $5000), startup founders could feel less like they are in a financial nightmare. I’m not talking about Dom Perignon and nights at Nobu – I’m talking about the ability to pay for server costs. For business cards (at one point Givto was too poor to pay for business cards…). Or for just peace of mind.  Through a veil of desperation, it’s hard to make wise decisions about the future of a company, especially when getting out of it looks (at times) like the only option.  VCs tend to think the only money that “moves the needle” so to speak is a $100k investment, but that isn’t the case. I think it’s the smaller amounts that say more, if only because it acknowledges a true understanding of the startup dilemma, and I think it also generates a level of trust between the founders and their investor.  As foolish as it sounds, Founders want to know that VCs care about more than the product, they care (even just a tiny bit) about us too.

This is also why Chris Sacca is (so far) my favorite guy out there. Not only does he understand the founders dilemma and is working to spread his theory on small cash infusions to start ups to other VCs, he also legitimately seems to care about “the kids”. His response (read it here), was not important in the sense that it was ‘a response to Ron Conway’. What was far more important were the ideas embedded in the email, and I urge every founder and VC to read critically and give these some thought.  After meeting with him (which was prior to Angelgate), I know this response is not just words but a firmly held point of view, and one that he talks about with passion. And that’s awesome.

  1. Leave a comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: