How Do We Prepare for the Bad Times?

If our startup sinks, everyone else gets a life raft — but Founders go down with the ship. [View this email in your browser]( • [Forward to a Friend]( If a Startup Sinks, Founders Go Down With it TL;DR: "If my startup takes a header, how would this affect me personally? Am I going to have to assume all of the financial liabilities of the company or can I just walk away if it goes south?" If our startup sinks, everyone else gets a life raft — but Founders go down with the ship. There are a million stories about how to scale a successful startup, but what we rarely hear about is what happens when things aren't so rosy, which is ironic since most startups don't have that picturesque outcome. The reality is most Founders find themselves inextricably tied to their startup baby at a very personal financial level. This means when things go sideways, it's not just the startup that's in jeopardy — it's our personal lives that get pulled into the mucky-muck. Today’s Advice Sponsored by [The Juice]( It's Not Business, it's Personal What gets easily overlooked by everyone else involved in our startup is how unlike them, we often cannot extract ourselves from the dumpster fire that is our startup. Unlike everyone else, we've likely signed on personally to all kinds of liabilities we barely thought twice about at the time. That office lease we just had to have? We personally owe the next 5 years of payments (check the fine print). That Amex card we were enjoying the points with? That balance is owed by us now, not the company — and it's due now. Everyone else has an inherent firewall. Our team can go get other jobs, our investors can write off the investment. But for the Founders, our woes don't end when our startup does. Welcome to Personal Bankruptcy Simply put, when we transfer the exponential costs of running a company back to personal liability, we're screwed. Paying $5,000 per month for an office lease might have sounded like a good deal for a company, but when that payment is due by us personally, it's game over. Oh, and did we mention we also have no income and no personal savings left at this point? Because that's kind of an issue too! Our only option to save ourselves is to file for personal bankruptcy to have any chance of fending off collectors from every corner. Do you know who else has to do that? No one. Costly Wind Downs With No Money To make matters worse, did we mention it costs money to wind down a company? Who pays that exactly? You guessed it — the Founder. Why? Because no one else is going to give up a single penny to help out — why would they? So now we've got a startup that has no money to actually put itself officially out of business with a Founder that has no money to get themselves out of the liability. If this sounds like an apocalyptic hellscape, it's because it is. This is the part of the Founder story they don't mention in the brochure and yet Founders like us deal with exactly this problem daily. We may not be able to save our startup from failing but the more we can protect ourselves personally from soul-crushing liability the better. Let this be a reminder, my fellow Founders, that we need to plan for the good times, but we need to be ready for the bad times. [Read More Here]( Get free marketing and sales intel in one place on The Juice platform Whether you're looking to land the next promotion or solve a sales or marketing challenge at work, [The Juice can help](. The ultimate industry insider hack, The Juice aggregates career-enhancing resources from top brands and thought leaders and organizes them in one place, so you don't have to keep filling out marketing forms for access (or dodging sales calls yourself). Start thinking like top B2B marketers and sales professionals [with The Juice](. In Case You Missed It [Many Startups Shut Down a Few Times Before Succeeding (podcast)]( Most startups are not overnight successes. In fact, many of them have to shut down (sometimes more than once) to build back up to the success they eventually achieve. [Startups Don’t Go Bankrupt — Founders Do.]( Startups don’t truly go bankrupt until their Founders go bankrupt. The problem is that Founders are often so focused on their startup’s finances that they overlook their own ability to stay afloat in the process. [How to be Resilient After Failing.]( Startups fail 90% of the time, so determined entrepreneurs know that failure is something they’ll have to confront regularly. Learning how to be resilient in the face of failure may not come naturally for all. Here’s where to start. Love this topic? Hate it? Let's chat on social media! Wil Schroter Founder & CEO @ Startups.com [Share]( [Share]( [Tweet]( [Tweet]( [Forward]( [Forward]( Copyright © 2022 Startups.com, All rights reserved. You are receiving this email because you joined Startups.com. Our mailing address is: Startups.com 1201 Dublin RoadColumbus, OH 43215 [Add us to your address book]( Want to change how you receive these emails? You can [update your preferences]( or [unsubscribe from this list](.