The Hand on the Purse Strings
I've had the pleasure and privilege of working in many different types of environments. From government organizations to my own bootstrapped startup, from funded companies to profitable businesses that took investment 10 years in. And I've worked on partnerships where one side was self reliant and the other had investors to answer to.
The difference in the environments is palpable.
How so? My experience has been that accountability to investors results in a less than ideal work environment and questionable decision making.
First, when you've taken investment, there is a need to hussle. To provide a return in a certain time frame. The effects of this pressure trickle down from leadership to the rest of the team.
And when your team consists of leaders of a certain personality type, the resulting culture can be toxic. We’re all familiar with the startup culture: long hours, perks used to cover up the lack of a healthy lifestyle, and growth for growth’s sake. That type of culture exists when the focus is on a fictional future … it’s almost a game for those who grew up playing with fake colored money.
Andrew Wilkinson put it well:
When you take venture money, you work for your investors, not yourself.
Unfortunately, the stakes are real for those who work for these companies.
The Motivation Behind Any Decision
While running my own self-funded company, we took part in a partnership with another company that had taken investment. The promotion we collaborated on turned out terribly, barely breaking even. And that happens … you roll with the punches.
But the reaction from my team was significantly different from the other team. We were disappointed, but they were fearful. This promotion was intended to bring some financial gain, gain that would reduce the pressure they were facing. When that didn’t happen, when we barely made up the costs we put into the promotion, my team chalked it up as a learning experience and their team was cursing and sweating.
The problem here was twofold. The pressure these folks were feeling to bring some return on the investment they’d taken caused them to make poor decisions. The entire promotion was rushed. This led to comprimising on some quality, rather than taking extra time to get the details right. And in the end, that showed in the results … which only compounded the pressure they were facing from the start.
The entire experience shaped my opinion that I never wanted to work with or for funded companies again. I would steer clear of any such scenarios. For four years, that held true before vivid memories faded and I took a position at a funded company.
On the other hand, when working in self-funded situations, the experience has been mostly pleasant. The pressure is internal rather than external, which is a world of difference. Leadership and teammates encourage everyone to do their best, to grow, but the motivation is entirely different.
Sure, when you're the boss who has to ensure that there’s enough coming to pay all the bills, that’s a significant pressure. After running Fusion for 3 years, I was happy to have a break from that aspect of entrepreneurship.
But the teams I’ve been a part of in self-funded environments have been the best I’ve ever worked with. There’s been a healthy balance of work and life. Best of all, everyone works hard together to create the best work of their career!
There are very few absolutes in this life. This is certainly true for work environments. It's likely possible to take funding and have a healthy, positive work environment. It's possible (perhaps even common) to work for an overly demanding boss in a self-funded company.
All of my points above are my experience and not a sweeping statement about all companies. Having said that, my personal opinion is that these statements are true more often than not.
When someone else has their hands on your purse strings, it results in a culture that is less than ideal.&