Two and a half years into my new business as a professional angel investor, my friend and wealth manager, David, dropped in for a visit. We caught up on our families, golf games, businesses, and the community. It was great to see him, and I really enjoyed his company.
Then he dropped the bomb on me. He said, “If your net worth continues to drop at this rate, I’ll no longer be your contact at our firm. You’ll be working with one of my associates.”
My Plunging Net Worth
I said, “You’re telling me my net worth has declined to the point where I’m no longer worth your time. Am I hearing you right?”
Of course, I heard him right.
When I started my new business as a full-time angel investor, my plan for resources was simple. I would commit one-third of my liquid net worth to my angel investing business. I would keep the other two-thirds with my wealth manager. My objective was to build wealth. His objective was not to lose it.
This meeting was a wake-up call.
At the time, I was invested in three companies. One was doing well and approaching break-even, thus requiring no further funding. The other two were still eating cash. Plus I had the continuing needs of my family.
And now David was forcing me to face the reality that I was tapping into my remaining security stash. The pressure to make this angel investing business work was quickly building. It needed to make money.
Later I would discover Kathy, my wife, kept thinking, “When is Charlie going to wake up and get a job?”
She didn’t know I was thinking the same thing.
When money gets tight, the first thing I think about is my family. One of my life principles is the husband is primarily responsible for supporting the family by providing food, shelter, clothing, education, and safety. As I continued to finance the new business, this principle was threatened.
As I thought through what failing could mean to my family and me, I shuddered. I said to myself, “This is going to work, but it will take longer and require more money.”
Recommitting to the Vision
My original vision was investing in twenty startups in twenty years. I would be helping entrepreneurs succeed in their dreams and building wealth at the same time. It was all right there in front of me. I recommitted. This was going to work!
I took an inventory. My resources included the money but, more importantly, the people. As I thought through these relationships, I became even more confident in our future. We were all passionate about our work. We were serving markets which were buying. We were committed to each other’s success.
I then recalibrated and re-forecasted how much more money it would take to get to positive cash flow. I had the money. This forecasting exercise gave me added confidence.
An Entrepreneur’s Resources
When thinking through my resources, I came to realize the greatest and most abundant resource I had was hope. I saw the vision as a reality. It was right there in front of me.
The scarcest resources were my time and money. Investing time and money with the hope of achieving my vision is what I came to realize it means to be an entrepreneur.
Eventually, three and half years later, it started to work.