What To Do When You're $30,191 In The Red

That’s how much credit card debt I had when I started at First Round in the Fall of 2009 — over 30 grand — residual from when you’re doing a startup and taking just enough to pay for the roof over your head and a few other things, then eating through your bank account and credit line for everything else. 

I can proudly say that I went as far as I could technically go — maxing out my card and having $17.91 left in the bank. The company and I both limped to the finish line at nearly the same time. 

Funny thing is, you can’t even take that out — because the ATM machine only gives you $20’s. 

I’m excited to say that my current card balance is finally at zero.  That felt really good to see.

I’m sure there are plenty of entrepreneurs who are no strangers to figures like that and can top me on that leaderboard pretty easily, but for me, getting that far in the red and coming all the way back was pretty significant given my prior attitudes towards financial risk. 

Before I started my company, I was pretty concerned about the idea of going without a reasonable paycheck.  I thought maybe the best way to be entrepreneurial was to try and start something within a big company so I could get a paycheck, but still be innovative.  My personal financial situation was my biggest concern going in, and after going through this whole thing full circle, I can say that, for me, it was not only worth it to take the risk, but that the experience wasn’t really that difficult to deal with.

First off all, I was pretty controlled about the whole thing.  I was very careful about spending and always made sure I had enough money to make my payments—because you never want to mess with your personal credit rating.  I worked at Fordham and taught the Kaufmann Foundation’s FastTrac course on the side to help make ends meet and keep the debt within shouting distance.  I knew my car payment was going to roll off at the end of 2009, too.

Plus, I had assets.  I had bought my apartment a few years back, putting 20% down.  In the years that I worked at GM, USV, and Oddcast I had been contributing to a 401k—maxing out my pre-tax contributions, in fact.  So, while my current balance sheet may not have looked so good, I knew that if I had to, I could take drastic measures to right the ship in an emergency.

Most of all, I knew I was employable.  After going through the experience that I did at my startup, I knew that was valuable insight and wisdom that would be useful to someone willing to pay me way more than I was willing to pay myself.  I knew if I kept my budget just as tight as I did when I was running a company, that I’d be pushing that big number down pretty quickly. 

The point is, you do what you need to in order to make things work.  Very few people knew what I was going through at the time, because it wouldn’t help to stress anyone else out about it.  You need a good sense of your tolerances and where your breaking points are, but as long as you work within those, the experience of pushing towards a passionate goal is going to trump many of the risks you previously thought you wouldn’t be able to handle.  It was a great experience for me and I’m glad I went through it. 

I’m also glad I got all those airline miles. Fiji anyone?

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