mcrock sep 12 2014 poser alert

POSER ALERT: Just because you work for a start-up does not make you an entrepreneur

I want to set the record straight.  Just because you work at a start-up does not make you an entrepreneur.  Just because you invest in entrepreneurs does not make you an entrepreneur.  Just because you sit on a board that makes decisions about entrepreneurs, does not make you an entrepreneur. For some of you (and I hope a lot of you), I expect you to say “No Kidding” but you would be shocked with how many people call themselves entrepreneurs but just suffer from Narcissistic Personality Disorder.  Yes, we are calling bullshit on the posers.  

One earns the title of entrepreneur when he or she takes significant personal risk and financial risk.  Personal risk means you are willing to put your 

reputation on the line for a new cause.  Financial risk means you are willing to put your family’s savings and equity on the line to build something from scratch.  For those of you who have never taken both personal and financial risk, you are not an entrepreneur.  For those of you that have, FAN-FRIGGIN-TASTIC!

Entrepreneurs have such an unhealthy level of commitment because they are fully responsible for success or failure.  Failure is ugly and failure hurts – it is not something to celebrate but rather something to learn from.  

So ask yourself a few simple questions:

  • Have you experienced sleepless nights because you are staring failure in the face and cannot even comprehend the personal and financial implications because they are so big?  
  • Have you ever made a shareholder loan to your business? 
  • Have you ever had to look in the eyes of your child to tell him that everything is going to be alright even though you know you don’t have enough money to get you through next month? 
  • Do you know how unbelievably good it feels to win when you have worked so hard and put so much on the line?

Entrepreneurs will have answered ‘yes’ to the first three questions and hopefully to the forth one as well.           

Put another way, if you negotiated a base salary before your first day of work, you are not an entrepreneur.  If you work within a larger organization and have responsibility for a business within that organization, you are not an entrepreneur.  If you have steadily increased your net worth through hard work but never sold or mortgaged those assets for your business, you are not an entrepreneur but you are likely an excellent operator.  Being an operator is a good thing but call a spade a spade.

The BS radar goes off when an entrepreneur encounters a poser.  Unless you have lived it, you can’t claim it.  So if you invest in entrepreneurs and are not one yourself, surround yourself with a few that have a clue.  Having half a clue is better than just being a pathetic poser.    

Author: Whitney Rockley, Co-founder & Managing Partner, McRock Capital

mcrock aug 21 2014 no this is not my boyfriends computer

No, this is not my boyfriend’s computer

Have you ever had one of those days that you can’t shake out of your head?  A day where you hear someone tell a story and it moves you in a really big way?  I had one of those days.  And the woman that moved me was Ping Fu. 

She came on stage with hot pink wedged shoes that she had made on her 3D printer.  Her demeanor was soft yet focused.  Her story remarkable.  She was taken away from her family at the age of 8 to live in a labour campus during the Cultural Revolution in China while caring for her younger sister.  She started to work in a factory at the age of 9, was raped at 10 and labelled a broken shoe.  She persevered for ten long years.  In 1983 the police asked Ping to leave the country and in 1984 she scraped enough money to buy a one-way ticket to the US and eventually studied computer science.  She worked day and night as a programmer for Resource Systems Group and Bell Labs.  Later she founded a 3D software company, Geomagic, secured venture funding and sold the company to 3D Systems.  She is the definition of iconic.    

Listening to her, I wondered why some of us go on and do great things while others don’t. Why is it that some people can persevere against adversity while others completely crack?  And even if we break, why is it that some of us can dust ourselves off and stand back up while others stay down?

I think people who persevere against adversity have a “whatever the F**k it takes” attitude.  They are beyond stubborn and have a relentless level of curiosity.  They are passionate – they love what they do and follow their instincts because not following it is not an option.   Ping Fu said, “When I first saw a 3D printer, I felt like I fell in love for the first time”.  Passion makes people unstoppable even when life tries to break them. 

That day I also met Brenda Barnes, Kegan Schouwenburg, Angela Ahrendts and Sheryl Sandberg  – all of which have amazing stories and unstoppable passion.  These women, and many others, have supernatural resiliency and courage.  And I realized in many cases there is a common theme.  People who are incredibly successful have faced adversity, usually at a young age, and have somehow figured out how to overcome it.  They dig deep inside of themselves.  They then apply this perseverance to other parts of their lives, whether it be their careers, themselves or their family.

So then I started to think about this question in the context of women in business.  Why don’t we see more C-level and board level women in business and, specifically, in tech?  Why are there not more Ping Fu’s? 

Women hold more degrees than men and make-up 58% of the professional workforce yet only 15% hold C-level and board positions in the corporate sector.   So is it really a numbers game?  There are many women in the workplace but the odds are against them as they rise in the ranks. 

Interestingly in tech we know, on average, only 1 in 5 computer scientists are women.  We know that teenage girls use computers and the Internet as much as boys but are 5x’s less likely to consider a tech-related career.  So how can we get more girls passionate about technology and business?  Tech needs to be “girl-cool”.  My daughter downloads completely different apps than my son yet boys are developing most of the apps, not girls.  How do I get her to start thinking about developing those apps that Wow her?  How do I introduce tech to her in an exciting way? When Ping Fu was asked this question, she said that every school needs a 3D printer for children to play with.  I believe girls, including my daughter, could find it fun creating mobile apps and designing jewelry and other fashion accessories on 3D printers.  

There are now clubs and resources emerging to entice girls and women that want exposure to coding:  Girl Geeks Toronto, Stemettes, Femgineer, Women & Tech, Ladies Learning to Code, Entrepreneur First: Code First Girls, Lady Geek and more.  The only thing is that my daughter doesn’t like the word “Geek” and she would raise an eyebrow if I said I signed her up to go to a Geek Club, even though I know these groups are amazingly cool.  She’d probably consider going to a Cool-Girl Coding Club instead. 

I end with a story that Ping Fu’s father shared with her.  Ping Fu’s Shanghai Papa taught her about how their garden had plants for each season and there was a story behind each plant.  He walked over to the bamboo and explained that it was flexible, capable of bending but never breaking.  It symbolizes resilience.  Her father grabbed a stalk of bamboo, bent it towards her and tickled her nose.  Let’s do that to our girls.  Let’s tickle them with tech. 

Author: Whitney Rockley, Co-founder & Managing Partner, McRock Capital

mcrock feb 2014 pile of pancakes

Where’s the return: don’t get stuck under a pile of pancakes

The secret to start-up and venture capital success is to buy low and sell high – full stop. I suppose this advice is not really a secret but most people think of this sound bite for public stocks and retirement savings plans. It also holds true for start-ups. The only way to create shareholder value and serious pocket change is to increase the spread between the dollars in and the dollars out. So buying low and selling high is all relative.

Ok, here is the real secret to success – ownership efficiency. The founder’s sweat equity, the employees stock grants and the VC investors bucks all convert into an ownership percentage in the company. The goal for everyone should be to provide the appropriate amount of capital to achieve growth that leads to a pay day. It’s obvious that the more investor cash that goes into the company, the higher the sale price tag must be for everyone to achieve a healthy return.

I don’t want to get into the gory details of VC financing terms but you should think of a company’s value as a stack of pancakes. The founders and employees have common stock which is the bottom pancake and every financing adds more pancakes to the pile. When an exit happens the top pancakes suck up all the syrup while the bottom pancake just gets cold.

The management and the investors’ goal should be to efficiently convert every equity dollar invested into value. Staying ownership efficient allows management and the brave early investors to be rewarded by maintaining their ownership positions. It also increases the chance of achieving a meaningful spread between the dollars in and the dollars out. Billion-dollar cash exits are rare so don’t confuse them with billion dollar private company valuations which are not so rare.  I struggle when entrepreneurs and investors brag about significant capital raises, especially those at lofty valuations. What I see is that the people doing most of the work (founders and employees) are getting buried under a huge stack of pancakes. Where’s the return? It’s in ownership efficiency, not building a big stack of pancakes!

Author: Scott MacDonald, Co-founder & Managing Partner, McRock Capital

mcrock nov 19 2013 balance pic square


As the holiday season is once again upon us, it serves as a reminder that there are other “things” outside of work to occupy our time and thoughts. For some entrepreneurs, this time of year is a welcomed reminder to redirect some attention to something other than business. For others, it’s just a reminder that causes momentary guilt but has zero impact on behavior.

There has been so much written on Work-Life Balance that one could spend a lifetime just researching how to achieve it. Some articles offer helpful tips and others, like Sheryl Sandberg, have declared “there’s no such thing as Work-Life balance”.

I have a very different take on the topic which starts with my understanding of Balance from years of being a gymnast. A very popular Canadian sport for men (Ha!) that is all about mastering the art of Balance. What I learned is that there is no such thing as Balance based on how most people think of it.  Balance is not a static “perfection point” that is achieved and locked-in. It’s actually a constantly changing state that requires dynamic adjusting. Being Balanced is about continuous adjustments that keep you within an acceptable range. Think of a handstand. It looks like perfect balance but it’s actually many lightning-quick and almost unnoticeable adjustments to hold the body within a “range” of Balance. Hit the edge of that range (in any direction) and you fall out of the handstand. In order to have Life Balance, you need to first set what that range (in all directions) is for YOU. With that understanding, you can constantly adjust to make sure you stay in Balance.

Yah, the trick I’m doing on rings above is way easier to Balance than Work-Life. But don’t feel bad that you work like crazy because you should work hard. You’re an entrepreneur!

Author: Scott MacDonald, Co-founder & Managing Partner, McRock Capital

mcrock sometimes you need to get uncomfortable pic square

Sometimes you need to get uncomfortable to get comfortable

I was listening to a story about a friend’s son who was experiencing his first “crush” on a girl in his class. His wise mother told him that he should simply ask the girl out. The boy’s reaction to this advice was one of fear. His mother looked him in the eyes and said, if you really want something bad, sometimes you have to get uncomfortable to get comfortable.

This lesson is brilliant and immediately struck me as something far more applicable than to just adolescent crushes. It is in fact the key to growing and evolving as a person. Take, for example, the leap to become an entrepreneur. Anyone who has ever started a new business will immediately resonate with this advice. In order to achieve greatness, you have to develop a mindset to constantly push yourself out of your comfort zone. When you look back, the obstacles that caused discomfort are now less daunting and can be replaced with new levels of discomfort. This is the essence of entrepreneurship. The craziest part is that when the comfort of an exit results in financial independence, some chose to do it all again because they realized they were not all that uncomfortable. It’s just the awkward position a giraffe has to get into, to drink water.

Author: Scott MacDonald, Co-founder & Managing Partner, McRock Capital