Lessons Learned from Failing a Start-up

The failed start-up I chose to use I hope is relevant, I found it because I googled the question and it was in the list somewhere. It’s not really in regards to failing in the early stages of start-up, but this article struck me and I thought it important to share. The article is by Alyson Shontel and is very recent. It’s about a male entrepreneur who on the outside appeared to be happy an expert at his profession, but on the inside he was not.

While sitting in his parked car, Jody Sherman shot himself in the head only days before his 48^th birthday. He had plans to meet up with a friend and hours after he didn’t show he was reported missing. Sherman was head of 28 others in a company called Ecomom which was backed by 65 investors, figures released stated that they had raised $20 million in total during their time as a start-up, but were in debit, and none of the staff knew how. His wife had no idea either. Many anonymous interviews took place and the general consensus was that he had trouble in his earlier years and while there were ups and downs he eventually became successful. Later in his career he moved his company to Vegas and it was said that he was never completely happy with that decision. He made poor financial decisions, and he also had issues with the taxation department.

As head on Ecomom, he was the only one with access to the organisations financial information, and he also had a black Amex on which he put the company’s expenses and refused a corporate card.
He also had securitized debit which to me illustrates the volume of money he owed to others.

Late last year he raised a large amount of money for his organisation, and while the article didn’t distinguish exactly what it was, it had destroyed his ambition. Once this deal was closed he used “fraud” and “sham” when refering to venture capital.

This is one of the hardest things I’ve ever had to do. And I hope to not have to raise more money for a very long time... I had no business raising that last round of financing...I hadn’t made our metrics or our terms—not anything near it. But I got it done.

Others gave input on what he had once said, and what they thought and gone on, but suicide always leaves questions. The article further lists awkward situations and failed attempts of trying to get back on top but it never happened and things were just not the same. The strong message I get from this and the part that stands out the most was that last amount of money he raised for Ecomom, and what he allegedly said after the fact. It makes me wonder what he did to raise the money, to leave such a foul taste in his mouth. I think the failure here came from Sherman’s dishonesty, maybe if he had been honest and open with his staff and wife he could have sorted through his financial issues and worked his way out.

Shontel, Alyson (2013) http://au.businessinsider.com/jody-sherman-ecomom-2013-4

Interesting further reading regarding start-ups and mental health

http://www.spundge.com/notebooks/7917/