Tag Archives: angel

The Scrupulous Entrepreneur: When do I leave my job to pursue my startup?

Written by Jason Shrensky, Dingman Center Angel in Residence

Often the question is posed: When do I leave my job to pursue my startup?  If you read the technology press, the answer seems to be “right away!” “Follow your dream!” is the advice of some successful entrepreneurs. To paraphrase others: “I couldn’t sleep at night just thinking about the opportunity. I quit my job the next day. You should do the same.” Of course, this flippant advice is offered in hindsight, often in the afterglow of a financial windfall. The scrupulous entrepreneur will answer this question for him or herself only after taking into account two big considerations.

The first consideration in deciding whether to leave your job to pursue your startup is family impact. How would you characterize the entrepreneurs quoted above if you knew that when they quit their day jobs to pursue their startups they had no plan to make sure that their kids had health insurance? Stupid? Reckless? Irresponsible? Would you want to invest in an entrepreneur that made such a choice?

One of the great unheralded traits of good entrepreneurs is the ability to get a business up and running without bankrupting themselves and hurting their families. To state the obvious, creating a self-sustaining business is hard. An absolute given is that the cost in terms of the entrepreneur’s time commitment is high and taxing not only to the entrepreneur but to the entrepreneur’s family.

Assuming that the entrepreneur and his or her family agree to assume the ramifications of the great time commitment involved, a second conversation that has to occur concerns the financial commitment. Leaving one’s job to pursue a startup will require financial belt-tightening by the entrepreneur and his or her family. Nonetheless, if there is buy-in from the entrepreneur’s family, a drop in discretionary spending and luxuries is easy to endure with the long-term goal of a successful venture in focus.

Thus, the lesson of the scrupulous entrepreneur who is considering family impact before pursuing a startup full time is that a) discomfort is okay, b) recklessness is not okay, and c) buy-in is required. (If you are 22 years old, single, and living with your parents, you’re good to go.)

But even after overcoming the first consideration, scrupulous entrepreneurs won’t rush to resign. The great first act of scrupulous entrepreneurs is staying employed as long as they can in order to “fund their hobby.” If they can manage getting their startups off the ground while fulfilling the duties of their day jobs, they will do it. (If working on their startups while employed would somehow be considered more unethical than conducting a search for a new job while employed, they will resign.)

It may seem like your day job is weighing you down and preventing you from moving as fast as you want on your startup. But, often the alternative is to quit your job and raise angel money. You are likely to find that raising angel money is just as time consuming yet less rewarding than your day job. If you have the right perspective, you should see your current employer as your first angel investor with the bonus that you don’t give up equity in your startup. Your paycheck is a sure thing; angel money is not.

Obviously, a separate email address and mobile phone are key tools for maintaining your double life. But don’t discount your vacation days. Use them judiciously. No trips to the beach. Vacation days are important for attending meetings and industry conferences relevant to your startup or cashing out when you eventually leave your employer.

In conclusion, leading a double life is hard, but many times it’s either necessary or simply the prudent choice. Scrupulous entrepreneurs value their families and fight on all fronts for advantages for their startups. They also don’t get any sleep. If you are a scrupulous entrepreneur, you won’t either.

Jason Shrensky is a local entrepreneur and angel investor who joined the Dingman Center team as an Angel in Residence in 2011. In addition to actively investing in early-stage companies, he splits his time between two startups that he recently co-founded: ÜberOffices and ComplexInterests. ÜberOffices provides co-working office space in the DC Metro area predominantly for early-stage technology and media companies. At ComplexInterests, Jason is working on developing a unique enterprise software package targeted at accounting, law, and financial services firms.

Connect with Jason on LinkedIn, Twitter, and Google+

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Center Stage with Ed Barrientos, CEO of Brazen Careerist

What is your involvement at the Dingman Center and why is it a special place?
I sold my company in 2005 and found myself retired at 40 years old. I wasn’t sure what I wanted to do next, but I knew I wanted to be involved in technology. In 2006, I heard about the Dingman Center and its Dingman Center Angels investor network. There was great interaction between the angels and the companies presenting. It’s such a great resource for me to find investment; to be tapped into the angel network. I was asked to come on board as an Angel-in-Residence, which is a great opportunity for me to be more than just a participant. I became a member of the team that gets to help vet the companies that present. I have really loved the connection with students.

What are you most focused on right now?
What’s taking most of my attention is Brazen Careerist. It’s one of my biggest investments and it’s a company I’m also leading. It had started in Madison, WI and then relocated to Washington DC about a year ago. What started as a part-time CEO-ship has become a full-time, 120-hour-a-week job. So far we have not taken traditional venture capital funding. We’ve pursued an angel-centric strategy, but wouldn’t discount VC funding.

How do you approach angel investing?
Every angel investor has a different philosophy. I typically invest in fewer companies and usually have two to four firms at any given time that I’ll spend a lot of time and energy on. What sets angel investors apart is that our know-how in dealing with startups actually changes the risk equation. In a startup, my background and involvement can affect the outcome.

What’s been your greatest entrepreneurial challenge?
The single biggest frustration has been dealing with investors that don’t understand the very unique world of startups. They may have other great experience, but it’s important to understand the world of startups. Oftentimes people think of startups as small versions of companies, but it’s really not like that. Startups are experiments and things are constantly moving. Metrics of profit, revenue, etc. don’t always make the most sense. It’s important to educate people on the true nature of startups.

What is the single most important piece of advice you could give going into an investor pitch?
You need to strike a fine balance between enthusiasm and arrogance. An pitch session is a scary place, with seasoned entrepreneurs and investors. For some people, the defense mechanism is often arrogance. Nothing will sink you in that kind of setting faster than arrogance. On the other hand, you want someone that’s enthusiastic and confident; someone that’s not afraid to answer questions directly.

Ed Barrientos has been a member of the Dingman Center Angel Investor network since 2007, and an Angel-In-Residence since 2010. Ed is CEO and Chairman of the Board of Brazen Careerist, a career focused social networking site targeting Gen Y. He is also Managing Partner of Zeitgeist Holdings, L.L.C., an angel investment firm focused on investing in early stage technology companies. From 1996 to 2005, he was President and CEO of Arc Second Inc., a high growth market leader in the field of laser based, high-precision GPS. Barrientos led Arc Second to a successful exit (acquired by Metris NV of Belgium) at the end of 2005. He sat on the Board of Directors of Metris NV, and worked as an active Board member through the Company’s IPO (2006) and its acquisition by Nikon (Japan) in 2009.  Connect with Ed on Twitter @snowcrash65.

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