How to cope up with startup failure and deal with bad investors?
I started my first startup at 21 with a lot of enthusiasm. For 4 years, I worked very hard, buit product, raised funds, acquired 35K+ users. But I failed to monetize product. Last month, my investor forced me to return back funds anyhow. With help of my family I returned his money also. Startup failure and my investor left me in major depression. I could not able to come out of this situation. I have tried many solutions, pychiatrists, meditations, travelling...etc I could not able to focus on my work. Please guide
This is why startups are hard. Deal with it. If you can’t, startups are not for you.
Well.. I think you can be kind with your words.. he has done more them you will ever do.. he is sharing his pain.. maybe we can support him and not judge. Everyone is learning ..
My words are not rude. Anyone who starts a startup or joins a startup should know the risks. It’s a gamble. Just like investing, it’s a gamble. If it was a sure thing, everyone would do it.
Do you regret the time at your startup?
I have enjoyed it a lot and learned a lot of things too. But I feel cheated
That’s good and all that matters. You feel cheated cause you got cheated. Investing in a startup is 100% at your risk investment. Make sure your future investors in your next ventures know this and a contract/ term sheet to outline everything would be beneficial for both parties.
Sorry to hear that. Hope you recover soon and get back at it again with the same enthusiasm!!
I have heard of claw back provisions for remaining funds in case of loss of faith or failure of a startup, but when you say you returned investor money with the help of your family I hope you didn't borrow your family's money to pay back an investor above and beyond what the business had remaining. If so that is pretty wrong of the investor to get you to do and is completely outside of the norm of standard practice in these kinds of situations. You need a lawyer if you don't have one already. I am super pissed on your behalf, sounds like you were taken advantage of.
Thanks I earn money from other income sources, the only problem is it has affected my mental health
Ok. So some advice on the mental health front and a story. I was the person who first commercialized a $20B industry. I spent a year building out the tech (it was was extremely complex problem), started a company, recruited co-founders (1 PhD in a relevant field, marketing genius, and math genius. everyone had an IQ above 150) and grew the company past $1m per year in about 2 years. I spent about 5 years of my life on it. Ultimately, I left because the founding team couldn't work together to achieve much of anything and I lost control of the company for various reasons and so couldn't fix the problems. This meant we couldn't stay ahead of the competition and were ultimately driven out of our core business. I made lots of mistakes and I was completely crushed by it. I was 20 and didn't have enough life experience to know how to not have those problems in the first place. But eventually I got over it. Time will help heal you and give you perspective, just don't ignore your problems. Try to think about what you learned from it. There are life lessons, market lessons, business model lessons, secrets of the market that you just have picked up. Maybe now you know or can use your experience to lean how to structure private investment so that an asshole can't take advantage of you. In my case these served me well and I ultimately exited with a wealth of new knowledge that helped me crush my next challenges. You will too.
I’m sorry to hear this. I’m also surprised he can force you to return funds. Did he give any reasons for that? Normally it’s an investment on his side so just because it doesn’t have any returns (yet) doesn’t mean he can get all his money back...
Like what everyone else said: On what grounds was the investor legally allowed to have his investments forcefully returned? You haven‘t answered the question, thus you cannot find closure to this problem, thus you cannot cope
Something is off. You’re not personally liable for debts of your startup. Worst that can happen is your shutdown and your startup goes bankrupt. Why did you take personal money to return to an investor?
My family has good name in market, if we don’t pay he would keep telling things to others. Problem is it has affected my mental health
What market? And he can now spread stories how your family is bunch of fools easy to scam out of money. You didn't have to return the money or it was not really a VC relationship between you and the "investor" or there's more to the story that you don't tell
Why did you return his money? Seems off.
Yeah investor asked to return the money? Was this not a risky investment? What if your startup took off and his money turned into 10 fold, he would have asked for just his investment back? It does not make sense to return money unless there was such clause or loopholes in official papers you signed
But he didn’t understand. Thanks