Fear of fundraising and the founder - 'Things are way tougher'

Founder, fundraising, and fear

Fear of fundraising among the founders, as well as an inaccurate estimate of fundraising.

Some founders struggle more than others when it comes to thinking about, assessing, planning, and conducting fundraising.

Fear is the leading cause of this. There are many different fears, or anxieties, that arise from various possible outcomes of fundraising.

The second factor is misjudgment, which is thinking that this should be done in a particular way and that the results will be positive whereas the particular way that they perceive things is flawed and they get outcomes that are opposite of positive. Or alternatively believing that fundraising will be much easier than it is.

If you are a founder or entrepreneur reading this, one thing to remember is that you cannot build a startup if you cannot fundraise. This is simply not negotiable.

It took me time to realise that many entrepreneurs who are afraid aren't saying anything about it. They find excuses to avoid their fear.

Some hang on to the other tasks they have that are within their capability, so they choose to focus on and try to successfully complete them while ignoring fundraising. Or sometimes they just play dead. And, once again, many of them are either unaware or unwilling to admit that they are scared and stay silent.

Only a few of them who were looking objectively at how fundraising tasks can be done correctly and what they need to clearly do to get this done, as well as witnessing how far they are from this or what keeps them away from this, were able to look at themselves and evaluate what they were missing on an individual level.

And again only a few members of this group were able to admit that fear is the barrier that prevents them from properly fundraising for their startup.

As I spoke with founders who were willing to acknowledge that there was a fault with their sentiments, I learned that their anxieties had distinct beginnings and endings. In other words, they are distinct types of fears.

Looking at fears or facing them while building a growing company is difficult but also necessitates quick action to optimize yourself as a founder.

Quick action is needed because it both takes time and effort to optimize yourself and then an ongoing process (fundraising) with your improved self.

Asking simple questions without upcoming judgement as a side effect of an honest response is always just enough to get the truth about anyone's fears. Unfortunately, that's easier said than done.

My interest in psychology, as well as my years of trying to understand my own fears at all fronts of life and discussing them with my psychotherapist, has occasionally helped me figure out what my fears are about or, more difficult, what the cause of a fear is.

In the past, my fears in business only resulted in negative outcomes or missed opportunities. The more I realised them, the more obsessed I became with understanding them.

Without figuring out the cause or source it was impossible to downsize the level of fear to healthy and real levels.

When it comes to fundraising, some of the most common fears that founders have are fear of failure, fear of rejection, fear of embarrassment, fear of messing up, and fear of speaking.

Here are some basic definitions of these fears and how they affect founders while raising funds:

• Fear of failure - Most common fear that causes founders to get into a paralyzed state.

People who have a fear of failure are motivated to avoid failing not because they cannot manage the basic emotions of disappointment, anger, and frustration that accompany such experiences but because failing also makes them feel deep shame.

Founders don't act or perform at their usual levels because of the damaging nature of shame. Instead they talk about the action they need to take or may select either easier, readily achievable objectives while procrastinating what actually needs to be done at another department.

This fear is directly related to self-esteem. Founders feel uncomfortable with the idea of fundraising because they are either afraid of failing in business or failing in fundraising.

Sometimes they are simply worried that they will be punished emotionally by people close to them.

• Fear of rejection - The fear of rejection is one of the most damaging fears for any individual.

It is so strong that most people choose to live half versions of their lives rather than risk someone telling them no.

People who are afraid of getting NO experience feelings of low self-worth, unlovability, and shame when they are rejected. Imagine having this worry while knocking on a bunch of doors to raise funds for your startup company. Or the exhaustion that comes with getting NOs multiple times.

You are doomed and probably looking for an exit way (procastinating or finding excuses) rather than conducting the fundraising task where you have to get maybe a hundred 'no' responses from investors while looking for a single yes.

• Fear of embarrassment - This fear is different from the first two. This is a social phobia that carries a strong fear of being ashamed, humiliated, or embarrassed in front of other people if and when they perform.

People with social phobia feel that showing anxiety is a sign of weakness or inferiority.

They also believe other people are watching them and judging them all the time.

This puts pressure and turns into a damaging fear when you go in front of people who have to make evaluations about you, your team, and your business to make an investment decision.

On the founder's side, fear of embarrassment can cause constant nervousness because of being evaluated by investors and also people at the founder's company-co-founders, management team, or employees due to the CEO's performance of fundraising.

While performing in front of other people, and being involved in social situations, important events, and meetings, people with this fear usually feel nervous before and during the event. Afterward, the unpleasant feelings may linger as they worry about what other people thought of them.

Fear of embarrassment is different from the first two fears of failure and rejection because it is directly caused by an outer source, which is what other people may think about you.

• Fear of messing up or imperfection - This fear is about having an obsessive fear of making mistakes.

Making mistakes is messing up and messing up is imperfection for the person who has this fear.

Someone with this condition is terrified of making mistakes and has extreme anxiety about this.

They tend to avoid any situation where they feel they won’t succeed because they may get punished.

They get obsessed with succeeding and being prepared for perfection all the time.

Or they avoid situations totally where they may make a mistake.

What I realized as a side effect of this fear is it causes a loss of objectivity about reality while focusing too much on perfection.

A sort of distorted reality.

• Fear of public speaking - A very common fear. As Jerry Seinfeld mentioned, according to most studies, people's number one fear is public speaking.

Number two is death.

A person gets anxious with a shaking body and a quavering voice while talking in front of people.

They get paralyzed, feel panic, and have difficulty talking while forgetting what they are going to tell.

Public speaking fear works closely with the fear of embarrassment.

The most frequent scenario is that the founder becomes overly stressed while presenting to investors, resulting in a poor pitch.

If you can't pitch your business and plans properly, it will raise lots of questions in investors minds and you probably won't get the money.

After working with the founders of many revenue-generating or only funded but not revenue-making startups, as well as with many at the pre-product stage, I've learned that founders often encounter many difficulties. And fundraising or fear of fundraising are two of the most common ones.

Years of psychotherapy have taught me that the only way to overcome a fear is to run to it. However, it is one of those cases where it is easier said than done.

You must be able to fundraise if you want to build a successful startup.

Bootstrapping is an option, but it is far more difficult.

And I say this as someone who has been a part of two large successful bootstrapped startup companies since their very early days--one with over fifty million USD in revenue and the other with over four million.

So fundraising is a task and skill that you must master.