Startup Houston

“You’ve got to know when to hold ‘em
Know when to fold ‘em
Know when to walk away
Know when to run
You never count your money
When you’re sittin’ at the table
There’ll be time enough for countin’
When the dealin’s done”

Kenny Rogers from The Gambler

Words like these are ingrained onto the psyche of anyone who grew up south of the Mason -Dixon line and/or in the late 70’s. Who knew that they would also be words of wisdom for company founders. If you have any experience with startups, you know what I am talking about and are probably laughing out loud right now (and I apologize if you end up humming this tune for the next 3-5 days in the shower).

The distinction I am trying to make here is that poker is a blind negotiation; running a company should not be. It should not be a game of bluffing, raising and calling but rather a collaborative endeavor between all of your stakeholders: founders, investors, employees, vendors and customers. With that in mind, if you end up negotiating with a potential partner that seems to be playing poker with you rather than acting as a partner, you probably have picked the wrong partner and need to move to another table.

All of this random banter stems from my time at BarCamp last weekend. While we engaged in our session about managing capital for your startup (something I will start writing posts about in the near future), several interesting comments were made that struck a chord in me (several of these are paraphrased):

• I want to grow my business without ever taking external capital.
• Watch out when your VC’s place a “shiny CEO” in charge of your business.
• If you are offered more capital than you need, go ahead and take all you can get.
• We could launch today but I want to work through some kinks and add some more functionality before we go to market.
• This round we are seeking will be the last investment we allow.
• We don’t have any competition right now because we are early adopters.

Watch a World Series of Poker event one night on cable and ask yourself if the players are playing with pre-concieved notions on how to gamble on a hand. Knowing when to hold, fold, walk away or run takes experience, practice and an open mind.

My point is, play the game but don’t expect anything other than a wild and heart-wrenching ride.