In social care settings there’s a phrase used in relation to trauma in that sometimes trauma to a person can be so bad that “recovery is difficult, if not impossible”.
I kid around sometimes about my fascination about software project failures, but for individuals who are very early stage in their business, it is possible to suffer financial trauma so bad that recovery is difficult if not impossible.
I certainly don’t give financial advice (ask both my ex-wives…) but this advice has a “financial advice” flavour.
There’s a lot of survivorship bias that goes on in the startup space in that we only see the ones that work (but we kind of know there are a lot that fail). And I talk to a lot of failures where they have spent a lot of money, and it’s done.
Like recently I was talking to a founder who was second career, in their 50s, they had remortgaged their house for £300k, outsourced development of their MVP, the outsourcing partner had produced something decent, but the product-market fit was no good and now they have nothing.
I don’t know much about that person’s situation, but on average within the UK, someone in that situation – who could? With 10-15 years to retirement, how do you make that money back? Again, I’m not sure the average person could. Recovery is likely difficult, if not impossible.
I like to be very bullish about the whole topic of technology startups and scaleups, but – again not financial advice, but kinda obvious – it’s like any form of investment. It’s risky – don’t risk making an investment that you can’t afford to lose.