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How Not Listening to Investors Kept My Company From Tanking

April 10, 2017, 10:30 PM UTC
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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 optimistic when your company is struggling?” is written by Art Papas, founder and CEO of Bullhorn.

When your business is in serious trouble, optimism won’t save you. No amount of smiling, chanted affirmations, or meditative centering will resuscitate a dry revenue stream or make your customers love you. In tough times, you need to embrace the practical, and activate what makes you a leader. You do whatever you need to do to stay alive and keep the company afloat.

In 2001, my company, Bullhorn, almost shut down. We didn’t have enough cash in the bank to make it break even, and we had all of three months of payroll remaining. We had only recently pivoted the company’s focus and had figured out our product-market fit, and while we were beginning to sign customers, none of those customers were paying us yet.

My co-founders and I had an arduous battle ahead of us. Our first and only institutional investor was completely unwilling to accept the idea of committing to a down round (when a company sells shares cheaper than it did in the prior round) due to the inevitable “optics” of it, even though financially, it would have been easily absorbable for them. They asked us to shut down the company instead of pursuing a down round, and that’s when a light flickered inside of me.

It would have been very easy for me to listen to our VC at that time and shutter Bullhorn completely. I was young, I was smart, and I could easily have done something else. But I didn’t start Bullhorn on a whim. I started it to solve a real and pervasive problem around talent management, leveraging the power of SaaS. Our investor (unsurprisingly, given it was 2001) was profoundly disillusioned with the Internet. and other failures left a bad taste in people’s mouths, and it was easy to assume we’d go down the same path to implosion.

But I wouldn’t take no for an answer. I could not accept defeat because it wasn’t time for the company to end. I abandoned trying to convince our institutional investor and instead went and knocked on the doors of our original angel investors who had helped get Bullhorn off the ground. They initially weren’t on board to give me more money to save the company. They also asked me to accept defeat and walk away.

See also: Here’s What You Should Do When Your Company Gets Off Track

The neater strategy was to listen to everyone else and cut and run. But I believed in our product, in the problem we were solving, in the value we could provide to our customers, and in the timing of what we were doing. The angel investors heard the conviction in my voice and my co-founders’ voices that the business was so close to taking off. I was convinced—and as a result, I was convincing. They could tell that it was worth putting more money into the business, mainly because I was 100% committed to Bullhorn, and they knew that if I could feel so strongly about an idea, there had to be something there. Ultimately, you cannot convince others to back you and bail you out unless you believe in your business.

Be persistent
There was no way to prevent the events that conspired to almost tank Bullhorn in 2001, and you may not be able to prevent tough times in your own business. But you can persevere and see your problems through to a) a solution, or b) their valiant end. You need passion, the will to live another day, and the scrappiness to go around obstacles. This is the definition of persistence. You have to will your company to succeed and muscle through the challenges you face. There are realities you encounter as a leader.

One of those is that people are going to try and kill your business. You cannot let things happen to you blindly, in a vacuum. You cannot let other people control your destiny, and you have to reject “conventional wisdom” that doesn’t apply to your situation. The established credo in 2001 was, “If your main backer backs out and won’t support you, then no one will.” We could have listened to that wisdom and packed it in, but our sense of belief and our willingness to fight and persist convinced us not to. Just because there’s a way things are usually done in no way means that it’s the only way to get to your goal. You are in control.


Our angel investors decided to fund us again, and they made 20 times their return on investment when we sold Bullhorn to Vista Equity Partners in 2012. Our institutional investor could have made more money had they accepted a down round, but ultimately, they turned out fine, too. Our story is a success story, and not everyone’s is. But as a founder who has seen ups and downs over almost 20 years running the same business, I will tell you: Honesty and relentlessness are more valuable than optimism any day of the week.