- September 10, 2017
- Posted by: Almodovar Group
- Category: Business Guidance
by Kevin Kruse, CEO/Founder at LEADx.org
As an entrepreneur, when do you know if it’s time to walk away?
Starting your own business is challenging enough, but when it comes to seeking investors things can become increasingly complicated. Soliciting start up capital can often feel like an endless slog, and while the end goal is to accrue savvy and supportive investors, it can become all too easy to take whatever money comes your way. So how do you know if an investor is truly right for your business? What should you look out for?
Radha Agrawal is a serial social entrepreneur who loves bringing people together. She’s the co-founder of Thinx and co-founder and CEO of Daybreaker, an early morning dance movement in 20 cities around the world with a community of over 350,000 people who love to connect through music, dance and yoga. Her upcoming book is called, Belong, which comes out in the spring of 2018 and explains everything she’s learned about community building with methods and exercises that she’s designed so that anyone can organize and create a community for their life and business. She was also named one of the top 20 millennials on a mission by Forbes.
I recently interviewed Radha for the LEADx Podcast, where we talked about some of her greatest lessons learned as an entrepreneur, and the start of her morning dance revolution. (The interview below has been lightly edited for space and clarity.)
Kevin Kruse: Could you tell us about a time when you failed, and what you learned from it?
Radha Agrawal: I have so many failures, this would be just one of many in the bucket. I would say the one that resonates the most with me is actually taking money. I specifically raised money from investors, millions of dollars. I raised $5 million for one of my businesses early on and I just took money from anybody and everybody. I had $20,000 left in the bank and I just really needed to make payroll. I just took money that was closest to me instead of the one that was best for me and in doing so I gave away control over my business. I signed on with impatient investors, and when you’re building a social enterprise like I was at the time, you need patient capital.
In other words, investors who are willing to wait a few years before you win the buy-in from all the different players that need to say yes to whatever it is that you’re doing. For me it was the government, the education system, parents, kids, everyone in the education space needed to agree to this project I was working on and it required several years. So the difficulty—and it wasn’t their fault—was in taking on money from traditional investors when I should have taken money from social venture investors, and that was a massive lesson early on. I lost control over my business, I had to walk away, tail between my legs, hostile takeover, it was a horrible experience. One I’ll never forget.
One that I try to share as often as possible because young entrepreneurs don’t often realize that all money isn’t always great money. That only some money is good money and that just because someone’s shining a beautiful, shiny object in front of you, doesn’t mean you have to go and take it. That was the big lesson for me. Just because you have only $20,000 left in the bank, in some cases, better to walk away then go on for years with a misaligned investor.
Kruse: It’s a hard but sometimes it’s better to walk away from something than to extend the negative experience with new partners.
Agrawal: It was five years of my life. Five years. Honestly, I took away so many lessons and I never make the same mistake again. Had I known two years prior, I could have been doing something else. Another thing I wanted to share just really quickly to add on to that one is taking on dollars from traditional investors who don’t necessarily value female leadership either. Just to give you a quick story, I was sitting in a boardroom with four men, gray suits, gray hair and they said, “I’m the CEO and the founder of my company,” and they said to me, “Radha, you stay here. Boys, let’s go outside and talk business.” This happened to me, I would say, three years ago. Not too long ago and you wouldn’t think this would happen in this day and age and that sexism is still a real thing in the space of entrepreneurship but it is absolutely a misogynistic space and one that I hope every woman listening really takes caution around and every man listening as well, remember to honor both sexes.
Kruse: There’s a lot of sexual harassment in Silicon Valley these days, but do you think it’s better in New York or is this a problem in the industry?
Agrawal: It’s a problem in the industry that 100% needs to be addressed. Every single female entrepreneur that I know has a 10X difficulty level to raise money than a man. Where women have to continue proving themselves, men only have to show promise. That is the big difference. We have to show proof of success, that I’ve had several positive case studies whereas men can walk into a room and show just the promise for a bright future.
Even for me as a seasoned, successful entrepreneur, I constantly have to prove myself as capable whereas men just need to present an idea.
Kruse: How’d you come up with the idea of Daybreakers, and can you explain the success of it so far?
Agrawal: Honestly, it’s been quite the enigma to me too, in some ways. We are all starved for authentic connection and when we started from the very beginning, it was really borne out of frustration over nightlife and how nightlife had gotten overrun by drugs and alcohol and everyone on their cellphones and mean bouncers and people wearing stiletto heels and makeup and really escaping the real versions of themselves. We really go out these days to be seen, not to connect and there’s a big distinction between those two.
So the idea for Daybreaker from the very beginning was to really invite authentic connection and community without alcohol in the morning where your energy is highest, where you’re most optimistic, where we all came from the same place, our bed. Think about it, when you go out at night, you might have been yelled at by your boss, you might have got in a fight with your boyfriend or girlfriend, there’s so many variables. Whereas in the morning your energy’s clear. You’re optimistic and excited and full, and so that was really the experiment. And then doing it on a weekday before going to work was the mischievous component because we can live such mundane, boring lives, one in which we go to the office, we come home, we Netflix and chill, and then on the weekends we go out to the bars and get drunk and come home and rinse and repeat.
The idea was, can we create something that gave a bit of a wink in the middle of your week on Wednesday morning? Most of our events happen on Wednesday mornings and before going to the office, you have a little glitter on your face as you go to the 9:00 am bell and that was that art project that we started on December 10th of 2013. It has since exploded because what we didn’t realize was that people across the world, across the country were really, really starved for this connection as well.