I was sharing my idea of starting a private equity investment business with my friends and mentors. I had some encouragement, but most of them thought it was a dumb idea.
Here is a sample of the feedback I received.
“You’re not an investor. You are a CEO. Do what you do best.”
“Are you nuts? Investing in startups is too risky? You’ll lose all your money.”
“You are good at identifying great leaders. You can do this.”
You’ll get all kinds of feedback when you share your idea. When it comes right down to it, the question remains, “Are you going to start this business or not?” My answer was “Yes.”
Having the idea is great. Taking action is greater. Action involves risk.
Risk of capital.
Risk of failing.
Risk of reputation.
Risk of ego.
The greatest risk is the risk of not trying. So off I went. Here’s how I did it.
Good bye, Charlie
In 1993, I wrote my first investment check. I was on my way. The business start was exciting, but within a few months, I realized the business was going nowhere. My first investment was going bust. And it was going bust because I was the CEO.
The co-founder of this first business resigned. She said, “I can’t work for you. I quit. Good bye.”
I was sitting there in a sublet office space with no windows, and I was down $125k. I wasn’t being true to the idea. I was afraid of being simply an investor advisor, so I took on the role of CEO.
Wrong. Wrong. Wrong. It didn’t work. I needed to stay true to the idea.
Within an hour, some crazy circumstances led to a new founding entrepreneur taking over. He used the scraps of the business to create a very successful professional services analytics business. It eventually grew to $7mm in sales in five years.
Failure Brings Clarity
The idea was gaining clarity. I built my model and reputation around this business.
I continued to write checks. This first business was beginning to happen but was still consuming cash.
Then I wrote a check for a second business. This business lasted one year; then we shut it down. Wrong founder.
Then I wrote a check for a third business. The third business failed. Wrong market.
The fourth business looked like it was about to fail when we sold it for $4.5 million plus debt.
Then came the fifth startup which succeeded in a big way, and I was eventually living the idea. My personal vision became my reality.
Ideas Must Lead to Action
All this happened because I took action on the idea I was percolating for five years and wrote the first check. I learned taking that first step, moving into action mode, creates momentum which creates more action.
Taking action every day while focused on your vision will ultimately bring success.