Do I Hate Investors?

Of course not. But the fact that people think I do says a lot.

Photo courtesy of Andre Hunter.

Seeking a round of funding is about the most miserable thing I’ve ever done. Truly. Fundraising was less pleasant and more demeaning than anything else I did at Puppet. But Clickety’s final (abandoned) round was uncomfortable in a new way.

Two different investors asked me the same question:

Why are you fundraising if you hate investors?

The question caught me flat-footed. Mostly because it’s such a stupid one.

I don’t love working with real estate agents. I feel like I’m being scammed. Even if I like my own agent, I usually don’t like the other one. I’m uncomfortable the whole time.

But in the US, it’s way harder to buy or sell a house if you don’t use an agent. And even if I went without, the other side of the party probably would hire one. So, I use a real estate agent. And I work with the agent on the other side at the same time. You want the house, you use the system.

And when I buy that house? I ask my banker for a loan. It’s not because I love bankers. It’s because I need help buying the house, and he’s in the business of helping people buy houses. Seems pretty straightforward. It has nothing to do with whether I like bankers, banks, or the mortgage financing system.

The legal system is similar. I actually do like a lot of lawyers. But… god, not all. And the way lawyers often work is stupid. I don’t actually think lawyers designed modern legal documents as a form of job security, but it sure looks like it sometimes.

But when I need to work with complex contracts, I hire a lawyer. It doesn’t matter whether I like lawyers or the US contract system; I have a job that demands legal help, so I go get it.

There’s a huge difference between all of them and venture capitalists, though: Bankers, real estate agents, and lawyers don’t demand that I act like I like and respect their industry. But VCs don’t just want me to start a great company. They want me to like and respect them for trying to make money off the work of me and my team.

Why was I fundraising from VCs?

To paraphrase Willie Sutton (maybe?), because they’re the ones with the money. If I want funding for my company, I need venture capitalists. What does it matter how I feel about the venture industry?

If you’re an entrepreneur today, there is no other source of capital. You can either bootstrap, or raise money from VCs. There are a few firms experimenting at the edges, like Calm, but they have a minuscule amount of money compared to the venture capital industry.

Yes, I could bootstrap. I’ve done it before. But it took four and a half years. I’m not as patient today as I was when I was 29. I also thought it made sense to start this company as a CEO and product manager first, rather than as a programmer. (In retrospect that was a mistake.) That made it impossible to bootstrap. I needed a team.

This question is just offensive, though. Its implication is “you should not raise money from investors unless you are willing to show respect and appreciation for the money they give you”.

Why? The world famously hates bankers and lawyers, yet continues to work with them. Why does this field get to demand our respect, when others don’t? Finance, especially, is just here for the money, and everyone – them included! – knows it. We just have to convince them we’ll help.

VCs are gatekeepers

Investors display their power by demanding your respect. They don’t invest in people who don’t show fealty to their image of themselves.

It’s how banking used to work: Some people got money, and some people didn’t. Fundamentals had nothing to do with it. You had to be in the right network, have the right skin color, the right class. Eventually bankers realized they made less money when they only loaned it to their friends. (And the US government forced them to back off their discrimination a bit.)

Most investors today will tell you to just “play the game”. This is what they mean: Participate in our discriminatory process, and show us proper respect. This is why you usually need a warm introduction to even be allowed to pitch them.

It’s a broken system that leaves broken people in its wake.

But I raised money within it, many times, because that’s where the money is.

Hate the Game, not the Player

No, I don’t hate investors.

But I do hate the world of venture capital. It is fundamentally flawed. It incentivizes behavior I can’t stand, and quashes behavior I find respectable and moral.

For what it’s worth, I also hate the larger finance industry. It’s not like venture is some rare target for my ire. There’s a reason I’ve never considered working in finance. (Well. There are several.)

Venture is an amazing engine for creation and invention. But it mostly invents stuff I wish didn’t exist. And it does not seem to be able to solve the problems that matter most to me or the larger world.

People appear to hear my dislike for their industry and think I hate them, personally. I can’t do much about that. I respect and like some investors. I dislike some others. But I generally have no particular feelings about a given individual.

That being said…

I don’t tend to respect investors.

Being a venture capitalist doesn’t automatically disqualify you from garnering respect. But it also does not automatically deserve it.

In the 1980s, finance was at its peak. People made ungodly amounts of money ruining the lives of thousands and thousands of people. And they were held up as heroes of business. We’ve largely learned that stripping financial assets is maybe not something we should be proud of. These people still get rich, but we have learned not to lionize them.

Is the modern venture investor as heartless and shameless as a PE investor from 40 years ago? Generally, no. (Although there are definitely exceptions.) But like those 80s wolves of Wall Street, VCs have found a money-making edge, and they’re ruthlessly exploiting it.

I’m just not that impressed.

I can see why someone would read that disregard and disrespect as hate. Especially given the power dynamic: I’m asking them for money, yet I’m not showing “proper respect”.

My banker didn’t demand I “play the game” when I applied for a mortgage. He just needed evidence that I could afford the house I was buying, and that it was worth what I was paying.

Being autistic means I’ll never be able to “play the game”. It’s literally constructed so only the in-crowd can join. I can mask for a while. But it takes hundreds of meetings to raise a round. Most people in the meetings look the same, dress the same, went to the same schools, and ask the same questions, yet think they’re special geniuses. And most of them give the same answer (“no”). It becomes hard to hold a facade.

It’s not a choice, or a lack of skill. It’s a hardwired neurological limitation. You might as well ask me to be taller, or have a lower voice.

For better or worse, I’m not sure it matters now. My personal limitations are likely to prevent me from trying to raise money again. But I hit those walls in large part because of how harrowing fundraising is.

Will I do it again?

My experience at Clickety tells me I’m unlikely to run another venture backed startup.

It looks like I’m already a bit of a pariah, which might explain part of why it was so hard to raise. (Not that I don’t deserve some of that reputation.) It’s not about to become easier for me. The older I get, the less I can handle gatekeepers. And I was already crap at tolerating them when I was younger.

My health — both physical and mental — would need to significantly improve. Running a company is stressful enough. Raising money was too much.

I won’t rule it out. I know my future is going to look different from my past. I have a lot of healing to do.

But I still believe in the power of software to make people’s lives better. And venture capital is a fantastic source of acceleration. I hope to continue to work with founders, and intrinsically that means working with investors, too, sometimes.

I also love solving problems. I hope to help others do it. But I won’t rule out trying to solve some problems on my own.

And maybe one of those solutions will be so good they can’t ignore me.