My Top Financial Mistakes as an Entrepreneur. That Cost Me Millions.

I’ll share a few of mine:

First, the big, meta financial mistakes:

1. In the first start-up where I was a VP, we as a team voted to sell our company to a company about to IPO for $1 Billion — instead of to Amazon for about $250m. The thing is, the company we sold to went bankrupt and I made nothing.
2. I sold my second start-up to Adobe, left after a year — and the stock went up 10x after I left. Worked out great for my CTO who stayed (proud of him), but if things were structured differently, I would have made nine figures just staying.
3. I had another chance to sell my start-up a company that IPO’d a few years later. Saying No made sense at the time, but in the end, we would have owned $2 Billion of that company, and I owned 20%, so $2B x 20% = well, a lot.

The list is actually longer than this :). These are just the Top 3.

My uber-lessons:

First, get even more advice on the Big Decisions. Get it from so many people, you can’t take it anymore. No one will be 100% right but you will learn a little bit from each of them.

Second, slow down the Big Decisions. All of the above mistakes I might have avoided just slowing things down.

Now the more tactical financial mistakes I’ve made:

1. Not raising a bit more money in my seed round.  We ended up needing another 6 months of runway.  So I had to work for no salary — and lost a co-founder.
2. Hiring a controller that didn’t care.  I avoided this mistake for my first two-startups, but then made it several times after.  A controller that deeply cares really keeps you out of trouble.  I had one that didn’t, and squandered almost $1m.
3. Getting complacent when we had a lot of cash in the bank.  This one is more subtle, but almost everyone makes mistakes here.  You can be too lean, but also, in some ways too flush with cash.  Everyone stops caring about being efficient, or the incremental dollar, when there is more cash in the bank than anyone expects or needs.

A truly great VP of Finance / Controller solves all these tactical financial mistakes.  A mediocre one … solves none of them.  Even makes them works.

(image from here)