What Raising $20 Million in Venture Capital Taught Me About Entrepreneurship
By: Hari Ravichandran
Tags: Business, Venture Capital, Entrepreneurship, Entrepreneur, Startup

What Raising $20 Million in Venture Capital Taught Me About Entrepreneurship

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The Entrepreneur Insiders network is an online community where the most thoughtful and influential people in America’s startup scene contribute answers to timely questions about entrepreneurship and careers. Today’s answer to the question “How do you stay inspired to run a business?” is written by Hari Ravichandran, founder and CEO of Endurance International Group.

The thing that inspires me to run my business is finding ways to overcome challenges and move the business forward — during every phase. When you start a business, you’re faced with very different challenges than when you begin to grow and achieve more scale.

Initially, the key things you need to keep in mind are developing a sustainable business model that can get traction with customers, securing enough revenue to pay your bills, and building a foundation for long-term success.

As you grow, you’ll have to look more closely at how your company should evolve to stay competitive, how you should define and create the culture of the company, and how to keep everyone in the company — including employees, partners, investors, and customers — moving in the same direction.

In 1997, I started a company called BizLand.com with my own seed money. Our goal was to help businesses get online. We had three offerings: web hosting, an e-commerce plug-in tool, and a shopping cart. What started as a small consulting business quickly grew much larger after we raised $20 million in venture capital and hired around 100 people.

However, in 2000, things started to take a turn. Our business model was based on ad-supported revenue, so when the dot-com bust hit that year, our revenue declined as the advertising market went down. Suddenly, our plan for a sustainable business dried up along with the ad-based business model.

With declining revenue and no way to pay employees or our business expenses, we were faced with a tough choice: reinvent the business or shut down for good. Because I believed that there was a market for our product and services, I was inspired to find a way to save the business rather than closing up shop. In late 2001, we reduced the team to 14 employees and were able to convert about 2% of our customers to a subscription-based model. We broke even in 2002 and renamed the company Endurance International Group in 2003.

Although this reset was a challenging experience, it ultimately set us up to achieve more scale and allowed us to ramp up to what Endurance has become today: a publicly traded company that employs more than 3,800 people in 15 offices globally.

These experiences have taught me to take one day at a time and focus on the big picture. Have a strategy in place that you believe in, and one that your team can embrace. Don’t let anything deter you from reaching your goal, even if you have to adapt the strategy along the way. Pushing myself to tackle problems and embrace risks is what continually keeps me motivated to grow the business.

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