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Yes, there are Founders who take personal money off the table during funding rounds, and no, you probably won't be one of them.

For the unfamiliar, there is in fact a practice whereby investors are sometimes willing to directly purchase shares from existing stockholders (like the Founders) in order to create some liquidity for them personally. It's called a "Secondary Sale" and it simply means the proceeds go to the Founder, not to the company proper.

The problem is most Founders just hear "investors will give me money personally" and assume it's a regular practice. It's not, at all, but it's also not something that's very well explained to Founders either. So, here's how this actually works.

When to Ask

A few things have to happen for us t...

I grew up with zero choices. As a broke kid with a single mom, I never really understood what people were talking about when they said they could "choose" how life worked for them. I just got used to being stuck with zero choices and dealing with the outcomes.

"Oh, you want to pay me 'ones of dollars' to mow your lawn? OK! I guess that’s what I have to do, because I need money."

Later on in life, I got to live this all over again as a broke startup Founder. No one presented me with an abundance of choices, I just took what I could get because I was constantly leveraged. Unfortunately, that runs a bit counter to the popular narrative we're hearing in startup culture, where we somehow have all the choices in the world and we're simply not ma...

In the moment when our startup ship is sinking to the bottom of the ocean, everyone has jumped on the life rafts, and we're wondering what the world will think of us, what goes through our minds?

Whether we fail or not, we've all run through the same scenarios. The only difference is when we fail for real, we get to see what actually happens. We get to see what kind of support we really have and what people will really think about us.

But what's both sad and comforting is how few people will care at all.

No One Actually Cares

In our minds, we're sitting around thinking that everyone is against us. Every investor, employee, partner, customer, even random people we don't know are sitting around taking turns bashing us. In every one of our soc...

The only way we grow is to bite off way more than we can chew.

There's this notion, however, that the way startups are built is by first building the entire product, team and infrastructure, and then attacking our market. While that sounds fantastic, it's actually not how startups grow.

We grow when we take giant leaps that are way beyond our current capacity and then figuring it out from there. In order to do that, we need to feel comfortable with taking these steps.

Am I Lying?

The first problem we all deal with is feeling like a fraud. We assume that if we're not 100% ready today, then we shouldn't even attempt to pitch our product to customers or investors. If that were true, startups would never get past a single Founder.

The reality i...

Just because it's our startup doesn't mean we still have upside in it.

Anyone who's taken on a single round of capital and has suffered the painful dilution that comes with has had the first taste of "reduced upside." We accept it though, like taking awful medicine because we know it'll make things better in the end. But at some point that medicine stops working.

At some point, we look around and realize that our startup no longer provides the kind of upside for us we thought it would. It was easy to overlook when we could see us "making billions" but now reality has set in and we realize we just have a really stressful job that pays us way below market.

Call it What it is

First off, we have to call it what it is — a shitty deal. Is it a sh...

Retirement is a beautiful lie we Founders tell ourselves.

We fantasize about one day selling our startup, retiring, and living this gifted life that makes all of our sacrifices worthwhile. We see this perfect existence that was only constrained by the shackles of our work and the drudgery that was our startup.

Yet it turns out while it may be a fantasy for us, many enterprising Founders before us have actually playtested this fantasy for real. As it happens, nearly all of us develop some version of the same fantasy and later on come to the same (much more sober) reality.

It turns out, it's really easy to tell ourselves what we're going to do when we retire, but actually doing any of that stuff is harder than building the startup it took to ...

The worst advice Founders get consistently comes from their hometown.

I call these the "local yocals" and every hometown has them. They are well-meaning advisors who try to guide a Founder through the startup stages but instead fill their head with irrelevant, outdated, and in many cases straight-up bad advice.

Every single time I talk to a Founder that's been clearly led astray, I ask where they got that advice. And in almost every case, it's from someone that simply isn't relevant to the startup ecosystem. It's their well-meaning uncle who made a boatload of money in commercial real estate, or a local angel investor who has no idea who YCombinator is, or the "startup guru" who had the one exit in town but has never left the state.

From a ...

What if I told you that you and your startup have all the time in the world to do what you need to do?

Perhaps you'd exclaim "Heretic! How dare you question the gods of startup urgency and scale!"

Yes, yes, I know. Time is our enemy and it's slipping through our fingers by the second. If we don't get done by this date, we're all doomed. But is that actually true?

What if instead of assuming that time is running out and killing ourselves to beat the clock we tested those assumptions to determine how much time we actually have? What if we actually had a ton of time?

I'm Getting Too Old!

"Good hell, I'm almost 30! If I don't get this startup scaled and sold, what will possibly become of my life?" No matter what stage we're at in our life, we a...

Sometimes the biggest financial startup success comes one paycheck at a time.

In our startup ecosystem, we've become infatuated with the concept that in order to be a successful startup we've got to have some massive IPO or sale. We sometimes forget that 99% of startups actually don't have that outcome and those people are buying Ferraris just the same.

The way most startups get rich isn't by that fairy tale exit (those are awesome BTW!) but by chipping away at growth and financial outcome over a longer period of time that gets them to the same outcome.

Digging a Hole vs. Building a Ladder

Imagine we've got two different paths toward creating our financial success. We're all pretty familiar with the first one, which is "digging a hole" beca...

Faking it as a startup is pretty much what being a startup is all about.

As first-time Founders, we just don't realize that it's the norm. Instead, we worry ourselves about not being a big enough company, not having a full staff, or not having a proven product.

Well, guess what? If we're just starting out, we fake everything!

Our Fake Website

"But wait, won't people find out that all we have right now is a cheap landing page that my cousin created and just a couple of products available?"

Yes, and they generally won't care. When is the last time you deliberated on the corporate structure of a company before making a purchase? Probably never. Most customers assume there is some level of functionality and deliverability in our product becaus...