At the Princeton business plan contest earlier this month, David Johnson, advisor to VCs and a VC fundraiser, was asked whether being involved in a failed effort would rule out an entrepreneur from future funding. His answer:
“Failure is not a problem. It’s a good thing to know what that feels like.”
At a venture competition some years ago, in the judges’ meeting before it started, the judges went around the room introducing themselves. We talked about our companies and our successes. Ty Pettit, an entrepreneur and fellow judge from Portland, Oregon, opened his introduction with the following (paraphrased):
“Probably my best qualification to judge this competition is that I’ve just finished mopping up a company I ran into bankruptcy and had to close.”
Can we talk about startups without contemplating failure?
I think it’s important to understand that failures happen. With good planning you minimize the chance of failure by doing some counting ahead, knowing what’s required and what’s at stake. But don’t ever bet what you can’t afford to lose.