The True Capital You Need to Start Your Business: Passion, Resilience, and Proactivity

Have you ever wondered where to find the capital needed to kickstart your entrepreneurial journey? It's a question that crosses the minds of many aspiring founders, and today, we're diving deep into the world of entrepreneurship to uncover the real capital required to build a successful business. Join us for this enlightening exploration.

The Early Days

When my co-founders and I embarked on our entrepreneurial journey, one of the first questions that weighed on our minds was: "Where will we get the capital to start our company?" We delved into the world of venture capital and angel investors, only to realize that without traction, real customers, or some form of momentum, raising capital would be an uphill battle. We decided to apply for startup competitions like MassChallenge and the WeWork Creator Awards, both offering a $200,000 MXN seed investment to early-stage startups. We entered every competition and lost each one.

Looking back, I can't help but think that had we won any of those competitions, we might have squandered the money without a clear path forward. Today, as the founder of a bootstrap business with 12 employees and millions of dollars in revenue over the last two years, I can attest that the most critical capital you need for entrepreneurship isn't found in venture funds or from friends, family, and fools. The real capital required to build a business lies within you and the like-minded individuals who share your vision.

The Reality of Entrepreneurship

Statistics tell us that only one in a hundred startups evolves into a Slack, Uber, or Airbnb. From Seed to Series A, only 20.6% of companies manage to secure the next round of investment and scale their business. In a saturated market where over five million new businesses were registered in the United States in just the first quarter of 2022, the odds of entrepreneurial success seem slim. So, what sets a startup on the path to becoming a scale-up? What resources can we use to turn our dreams into reality?

My theory is that the capital needed to start a business comprises three essential elements: resilience, passion, and proactivity. The real capital that determines which companies survive has more to do with how you grow as a founder than with how much money you've managed to secure.

The Three Keys

Passion

Albert Einstein once said, "If I had one hour to save the world, I would spend 59 minutes defining the problem and one minute solving it." This statement holds a profound truth, especially in entrepreneurship. The journey begins with identifying a problem—a deep understanding of a pain point, issue, or need people have—and crafting a solution that outshines existing options.

Starting a company centered around a problem means that you, as an entrepreneur, will obsess over that problem for the rest of your career with that business. It involves daily analysis, deconstruction, surveys, interviews, mapping, and scrutinizing the issue from every possible angle. This is where passion becomes the fuel that keeps you going, even when faced with challenges that seem insurmountable.

Proactivity

Ben Horowitz once said, "People always ask me, 'What's the secret to being a successful CEO?' Sadly, there's no secret, but there is one skill that stands out: the ability to make the best move when there are no good moves."

While passion fuels the entrepreneurial journey, it's proactivity that transforms ideas into reality. Many aspiring entrepreneurs have brilliant ideas, but they often remain just that—ideas. Taking action and pushing through external limitations to turn an idea into a reality is what proactivity is all about.

It's essential to recognize that when you start a business, if you don't take action, no one else will.

Entrepreneurship has been romanticized by the media, TV shows, and movies, portraying the dreamer who faces countless rejections until someone finally says yes and builds a world-changing business. However, amid these exciting challenges lies a multitude of tasks that entrepreneurs must undertake to avoid becoming part of the statistics—where 80% of businesses fail within the first year.

Grit

Angela Duckworth coined the term "grit" in the context of passion, ambition, resilience, and persistence. She found that the best students were not necessarily the most intelligent but those who worked hardest and dedicated more time to their studies. Similarly, in entrepreneurship, it's the grit—the relentless determination and dedication—that sets some founders apart.

Entrepreneurship doesn't come with a manual. To disrupt an industry, you must be willing to break the rules and create new paradigms. Starting from scratch, especially since entrepreneurship is laden with errors and uncertainties, requires resilience and a high tolerance for frustration.

So, is it impossible to embark on entrepreneurship without possessing these characteristics?

In the words of Vincent Speranza, director of Endeavor: "entrepreneurs are contrarians."

I believe that entrepreneurs aren't necessarily born; they can also be made. Much of a person's professional life is about maturity, and maturity is something that comes with time. In my personal journey, I never thought of myself as an entrepreneur. I wasn't the kind of person who read thousands of entrepreneurship books or the most organized person on the planet. I never persevered in anything during my childhood; I often abandoned projects halfway through. However, when I decided to venture into something I was deeply passionate about (social impact) and chose to do it with partners who complemented my skills, I was able to develop what I lacked and build the necessary skills to create a business that has changed the lives of over 40,000 people and will soon impact millions.

I've written this article based on my experiences in the entrepreneurial ecosystem over the years. I've lived through a pandemic alongside entrepreneurs who were on the verge of losing everything, while, in the same timeframe, the first unicorns in our country emerged. My co-founders and I, with minimal experience and limited resources, have built a social impact company that is profitable and experienced a 25X growth during COVID-19. All these stories I've encountered have countless variations but one common thread: resilient, passionate, and proactive founders who have fought through adversity to reach where they are today.

In the words of Vincent Speranza, director of Endeavor, "entrepreneurs are contrarians." While funds are undoubtedly needed to scale a business, innovate, and create something the world deems valuable, we need leaders who possess these intangibles. I'm convinced that, more than brilliant minds and millions of dollars, we need individuals who are passionate, driven by vision and purpose, willing to leap into the unknown, and work tirelessly to change the world. The rest will follow.