Cutting the Nets Down - Dreaming your Dream Through Adversity

An old colleague always used to tell me that Halloween was a magical day - not for just kids, or parents. But, for everyone else, and not for the reason you’d think. People want to be someone else for a night – to wear a mask and play pretend. 

I would have probably laughed off her thoughts - but she was also someone who played a high stakes game of pretending everyday for a living...in some of the most dangerous places on earth. Her gut instincts were about as good as anyone I’ve ever met - she was also completely bought in, and believed. 

Jimmy V’s cutting down the nets (the only link here, so I hope you click) exercise is a powerful example. In 1983, NC State had to win the ACC tournament just to make the NCAA tournament - and have a shot at cutting down the nets. As a 6 seed, cutting down the nets probably felt like an impossible dream. As a 7 point underdog to Houston (with Hakeem Olajuwon and Clyde Drexler) in the championship game, it was still an improbable dream. 

After years of cutting down imaginary nets, the process went from awkward to an actualized dream. NC State won “on the dunk” with 2 seconds left - transforming the imaginary mental painting into real life.  

No one has a crystal ball, and timing the macro/markets is next to impossible (even for someone in a Jerome Powell costume). But, 2024 looks like it could be an incredibly rocky year for founders - and funders. My next newsletters offer a bit more perspective, and tips for founders - but this one has a simple message. 

Jimmy V insisted that “I am going to dream my dream” - and as a founder, you have to have the same mindset. It does not matter what you’re going through, or how many hurdles you have to jump. It does not matter if you have to wear a mask to maintain the belief in yourself - or your team. You just have to believe you can do it - and fight to make it happen. 

I was skeptical that I could raise even $10m in Fund 1. And, I seriously wondered if I could raise Fund 2. Raising money in 2023 has been a game of “survive and advance” - and felt improbable at times. It didn’t matter if my Fund 1 LPs were really happy. It didn’t matter if the portfolio was generally doing well (vs. the rest of the vintage). It was a matter of timing, and access to willing dry powder. And, the timing was/is terrible. 

I still remember attending an event in Baltimore as I started raising Fund 2 - telling one of the key interlocutors in the city that I wasn’t sure Fund 2 would happen. My faith in this thesis was not even slightly shaken, but my faith in raising a viable fund was not exactly solid. Despite all the talk of bolstering Baltimore and investing locally, he barely reacted and shrugged his shoulders. I hate asking for help, and I did not give him a firm ask - but it was clear it would have fallen on deaf ears. After a few similar conversations, something in me snapped. I could still see myself cutting down the proverbial nets - and had to do absolutely everything in my power to make it a reality. Even if I had to wear my own mask in public, I would do whatever it took.  

Fund 2 is now a firm reality - thanks to the continued faith of many Fund 1 LPs and new investors. I have some truly amazing local LPs - and am very grateful for their support and referrals. Without them on my team, there would be no game - and no nets to cut down. But, the Fund 2 raise shook my faith in many things - and changed the way I see the world. 

The same storm that hit the fundraising market for smaller funds (and may hit larger funds soon) is starting to hit founders. Funds are getting more aggressive on terms, follow-on funding is starting to dry up, and initial checks are getting tighter. Clients are getting harder to close (and start contracts), and churn is creeping up. While the storylines could always reverse course in 2024, I don’t see many tailwinds for founders. 

Some founders will march along largely unaffected, but many of you are already starting to feel the sting of markets/macro reversing course. If you’re raising, or will be raising money, you may feel like everyone is passing on your company (and yourself). If you’re trying to close new clients, you may feel like nothing is closing. And, if you’re trying to upsell (or even just retain) current clients, you might feel like you’re constantly having to prove value. In short, it may start feeling like you’re one of the only people who still sees your dream - or feels the same faith. 

It’s very tempting to let all the rejection seep in, and either lose faith - or start doubting yourself. The rejection stings, and no amount of sugar coating can make it feel better. But, VCs can be wrong (including myself). Prospective clients may have to overcome internal politics or bad internal decision makers (especially risk averse ones with startups). And, some existing clients can’t just manufacture budgets out of thin air. While it might start feeling like things are spinning out of control, the only thing you can truly control is your own faith. Faith in your company’s mission - and faith in your own ability to make the dream a reality. 

Halloween is just one night a year. However, you might have to leave your mask on throughout 2024 around certain people. And, you may have to keep pulling out your golden pen (or keyboard) and signing imaginary acquisition (or IPO) documents. However, the more you believe, and the more you still see this vision - the more likely it’ll become a reality. 

Before the NCAA Tournament, NC State sat at 17-10 - and had to beat Michael Jordan’s UNC team, plus Ralph Sampson’s Uva team to even make the NCAA tournament. NC State barely beat Wake Forest in the first game (71-70), had to go to overtime to beat UNC, and needed a late steal vs. Uva to escape. 

While NC State had to survive and advance before the actual tournament, and was a bounce or steal away from potentially being left without dancing shoes - they kept faith. They kept fighting, and kept believing. It didn’t matter if it was improbable, or at times, almost impossible. They cut down the imaginary nets for years - to eventually cut down the actual nets. Your dream of building, and selling your startup might start feeling improbable - especially in 2024. But, if you’re willing to deeply believe, and fully buy-in through all the adversity, you can achieve your dream.