Dear Founder summary

Fundraising is vital, but it’s a hard slog. At times, it’ll seem pointless and leave you feeling like Don Quixote – the mad Spanish knight who charges down windmills he’s mistaken for giants in Cervantes’ eponymous novel. But here’s the thing: if you’re struggling to make headway, it might just be because you’ve forgotten a couple of basic fundraising rules.

The key to raising money is finding the right contacts. That means you need to be discerning when it comes to putting together a list of potential investors. So what does that look like in practice? Well, a good start is to make sure you’re targeting people who know your industry. If you’re launching a pharmaceutical product, for example, you don’t want to be calling investors who specialize in the music industry.

As an entrepreneur, it’s natural that you’re protective about your business – after all, it’s your baby. That’s sometimes a problem, though; like an overprotective parent, the urge to micromanage every little detail can be irresistible. But that’s ultimately counterproductive. Running everything yourself won’t just stress you out – it might even kill your beloved company.

Luckily, there are plenty of simple tools you can use to increase your employees’ efficiency without constantly hovering over them. The key is to create a company culture that encourages excellence. That’s all about communicating your goals clearly and motivating people to accomplish them by rewarding achievement. And remember to be generous; if your team completes 80 percent of what it set out to do, chalk it up as a triumph.

Webb knows all about how hard delegating tasks can be. Take the case of one his managers. He was getting great operational results from his team, and the sales figures looked great – but the people under him were constantly criticizing his tendency to micromanage employees. The manager was exhausted, and the team was frustrated by its members’ lack of autonomy.

In the end, the manager decided to stop micromanaging. When the author later asked him how his project was doing, he told him that he didn’t know. He’d delegated the task to his team and washed his hands of the matter. Needless to say, that isn’t exactly a shining example of great delegation!  

When Webb was interviewed for his first job, a position at IBM, he was asked how he’d feel about firing someone. Webb replied that he reckoned he’d be able to do it but couldn’t imagine it ever being necessary. The interviewer laughed out loud. Webb would soon understand why.

There’s no getting around it: some people just aren’t cut out for their jobs. Ask the average manager how many employees he’d hire again after having seen them in action for a couple of years, and he’ll likely tell you that 80 percent of his calls were correct. That leaves the 20 percent: serial underperformers you’d be better off replacing.  

Stress lurks around every corner when you’re an entrepreneur. Take it from Webb. He remembers getting up one morning at 5:00 a.m. because he had a two-hour drive ahead of him to get to an 8:00 a.m. meeting in San Francisco. Before heading out, he sat down to quickly shoot off a couple of emails.

When he fired up his laptop, however, disaster struck: he couldn’t log in to his account, even though he was using the correct password. Reloading the page didn’t help, either. To top it all off, Webb had a nasty bout of the flu and was feeling awful. It was the worst possible start to an already pretty intense day.

A couple of years back, Yahoo began developing a flight search tool called Hipmunk. The project looked set to become a success until Google dropped a bombshell: it was working on its own competing service. It was a blow for Yahoo. No wonder: competition, especially from a giant like Google, always makes fundraising a lot tougher.

But that kind of challenge doesn’t just frighten managers and employees; it also tends to scare investors. In fact, it’s usually when they ask you if you’re worried that you know you’d better start worrying! So what can you do when a rival moves onto your turf?

Imagine a bomb scare on a subway system. The authorities have to react, but they also need to make sure they’re reacting in the right way. In other words, the best thing they can do is make sure they’ve assessed the situation correctly. That’s also true in business.

If you find yourself in a crisis, the most important step is analytical: determining whether the crisis is real and, if it is, finding out just how bad it is. To do that, you have to make use of a key managerial skill: listening. After all, it’s usually your employees who’ll first notice something’s wrong. If you want to anticipate issues, you’d better keep your ear close to the ground!