You’re on your own

Ondřej Fryc

August 3rd, 2022

Reflex Capital → Blog → You’re on your own

I didn’t get it before either. I had an investor, a co-shareholder, a partner in my company. I put everything I had to the company. All my time, all my money. I pledged my house, gave up my salary. But in hard times, it was not enough. I went to my investor, and I expected them to provide some much-needed money, because he had the cash. And he surely wants to save his previous investment, right?

“Sorry, Ondrej! You’re on your own,” was his reply. There will be no money. Are you going under? Shit happens. Fingers crossed, good bye.

Is this fair? Hell, it is not! That’s your immediate reaction. I mean, every partner has to do the best they can. … or do they?

Well, let’s reiterate the most important rule of business. “There’s no justice in this f’ing world“. We’ve been over this before. But most importantly, the investor is playing a different game than you are. You have one card to play, you’re all in. And that’s one of the reasons the investor entrusted you with his money. But the investor has sort of a Monopoly bet with you. He plays the game with his money and is responsible for its return, not for how many “streets” he keeps alive. That is, if he is a good investor (“does his job well”).

This is not to say that the investor is an emotionless machine, who is not sorry when a portfolio company goes bust. He does sometimes have internal dilemmas about whether he should help someone, even if he doubts the return on such a cash injection. We do this all too often at Reflex I am afraid. But what I say is: stop crying. If you want investor money, present the investor with an attractive investment, but don’t play on their emotions.

And remember: rely on yourself, it’s your business. And you have to figure it out.

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