Are You Willing to Risk Everything?

by Ash Kumra

This chapter is a free excerpt from Confessions from an Entrepreneur (Volume 1).

Scott Painter: CEO of TrueCar

I have been an entrepreneur ever since the day I realized I could “never hold a real job.” I would argue that being an entrepreneur can be a high-paying vocation, yielding the largest return for creating real value—but it is also the riskiest, most volatile, and most terrifying vocation any human being can choose. It is truly a test of perseverance, dedication, and confidence.


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Scott Painter: CEO of TrueCar

I have been an entrepreneur ever since the day I realized I could “never hold a real job.” I would argue that being an entrepreneur can be a high-paying vocation, yielding the largest return for creating real value—but it is also the riskiest, most volatile, and most terrifying vocation any human being can choose. It is truly a test of perseverance, dedication, and confidence.

You need to ask yourself: Am I really an entrepreneur? Am I willing to risk everything and not be afraid to lose it all? Do I understand the keys to fundraising, and am I capable of handling rejection? As an entrepreneur and fundraiser, I have started over 37 companies and have raised over 1.25 billion for my companies or those of others, but this last question brings back a memory which I often share with new entrepreneurs.

About seven years ago when I started TrueCar and began the initial fundraising, I had an assistant who had said to me, If anyone knew how often you were rejected, they would be so depressed. For any entrepreneur, rejection is part of the journey, but for many of us, rejection is is often softened by our innate optimism. The bottom line is, if you have a good business model with a thoughtful and thorough business strategy, you WILL be discovered by investors willing to provide capital and invest in you.

If after reading this section you are saying, Yes, I am an entrepreneur, then your #1 job now is fundraising. There are a key elements to fundraising that every entrepreneur must know; and the first and foremost is how to “speak investor” because knowing how to cogently present yourself, your company, and your story can make all the difference. This means having a real understanding of the language of fundraising and becoming completely fluent regarding the myriad legal and financial documents that will eventually construct your business. Some examples of these legal and financial aspects of starting your own business include:

  • Statement of Cash Flow
  • Balance Statement
  • Common Stock Purchase Agreement
  • Certificate of Incorporation
  • Standard Protective Provisions for Equity and Debt Financing
  • Investor Rights Agreement (IRA)

If entrepreneurs are completely conversant on the legal and financial issues of starting a business, then their potential success then boils down to a good idea. I often tell entrepreneurs don’t try and make a good idea betterknow your business and take it seriously because fundraising is an absolute test of whether or not your business has a good reason to exist. And, if you take someone’s money without returning it, you don’t have the right to be an entrepreneur.

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For the past three decades, Scott Painter (entrepreneur, founder, and CEO of TrueCar) has been on a quest to bring objectivity, truth, transparency, and balance to the automotive industry by harnessing never-before-available amounts of big data. Throughout his prolific career as entrepreneur and fundraiser, Painter has started over 37 companies and has raised almost 1.5 billion dollars.

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