Welcome to the Lapsed Founder Club

A 6 step framework for founders who are struggling with closing their business

Photo by Karim MANJRA on Unsplash

90% of startups fail. So did mine. So did yours. 

In the past decade, I have founded three companies, raised $40 million, won international awards and had clients around the world. I am currently the CEO of an energy company and the COO of a hedge fund.  

While my startups were growing, the world was our oyster. Respect from friends and family. Belonging to the elite of the working world - startup founders. Invitations to exclusive events. Winning awards. International clients. You know what I’m talking about. 

But when we had to shut down? Crickets.

I’ve had to close two startups. Each time I closed a startup, I went through:

• Shame (“Am I a failure?”), 
• Guilt (“Sorry for losing your money, Dad”), 
• Isolation (“Who am I? I was a Founder! Who am I now?”) 
• Uncertainty (“What will I do next? What can I do next?”), 
• Fear (“How will I provide for my family?”) and finally,
• Loss. 

Avy Leghziel is a career expert who has helped hundreds of professionals with career changes. We’ve teamed up to do two things:

1. Remind you that you belong to a category of professionals with a very specific, valuable profile. 
2. Provide a framework, based on pioneering social sciences models and the experiences of real founders, to help you move to your next step. 

By virtue of having succeeded in starting your own business and then deciding to shut it down, you have joined a wide group of entrepreneurs and professionals who saw a shot and took it. That is impressive. Most people with great ideas usually leave them in their showers.

The members of the Lapsed Founders Club can be grouped into three broad categories:

1. Those who get stuck in the trauma of having to close their business.
2. Those who are almost unaffected by this momentary failure.
3. Those who take the time to grieve, recover and move even further forward. 

If you are in the first category, please be responsible to your family and friends and seek professional help. You owe it to them and to yourself. 

If you are in the last category, this article is for you.

Welcome to the 90%.

Welcome to the Lapsed Founders Club.

[If you are one of those who seamlessly moved forward to the next venture - it is great to see you here, Elon.]

Avy and I live in Israel. There are currently 6,651 startups in Israel. Let us assume the average startup has 2 co-founders, lasts an average of  2.5 years and 90% then close. This means that each year there are another ~5,000 highly talented, extremely courageous people who have shut down their businesses. There are many people who are going through the same things you are, right now.

Continuing with Israeli statistics, there are roughly 4 million employed persons in Israel, of which there are roughly 13,300 founders. Remind yourself that you are in the 0.33% (3 out of a thousand) who dared to try and change the (business) world. You are not a failure. You are a 0.3 percenter. If someone chooses to look down their nose at you, they probably would have looked down their nose at Prometheus when he came back down Olympus with fire (“What is wrong with raw meat? I am not touching that fire - you could get burned!”). 

That being said, you might be going through a very tough time now.

Similar to the five stages of grief or to the dynamics of a breakup, the path from closing your business to coming back stronger than before goes through six stages. Each stage will require you to shake off some of the assumptions you used to have, whether consciously or subconsciously, and proactively advance your own professional and personal development. On the other end of this path is your next career phase, on your terms.

Let’s get started, shall we?

Stage 1: Productively Process

You have suffered a huge loss. Take the time to grieve. Feel free to shout at the moon (or call us for a list of particularly jargony VCs). If it feels like mourning, it is because that is exactly what it is. The healthiest behavior is to go through it properly and only afterwards - move forward. 

When the time is right, try and focus on two things:

1. You are not alone.
2. You are not a failure.

Here are our recommendations for this stage:

Professional Outcome: Reframe this setback as what it is - a setback, not the end of your professional journey.

Personal Outcome: Move from feelings of failure and isolation to understanding that you are part of a small but mighty segment of the professional world - lapsed founders.

Lapsed Founder Tips: Take the time to grieve. Admit to yourself that you are sad, that you feel like you have lost a loved one. That you are embarrassed/lost/confused or even lonely. This too shall pass - but only if you admit that you are feeling it. On the outside - you do not have to share your internal feelings with anyone else. If you feel like putting on a brave face, that is absolutely fine. But when you go home - you have earned that bucket of ice-cream. To the extent that you are able, try to focus on being in the moment with your loved ones, even if it is only for a few minutes at a time. They loved you before you were a founder and they still do. 

Stage 2: Analyze your Experiences

Photo by Charles Deluvio on Unsplash

Ok, you now acknowledge that you are not the only founder in the history of mankind to close a startup. Maybe we have even somewhat convinced you that you deserve some credit for even trying in the first place. Right now, you are probably feeling somewhat abandoned and disoriented. Yesterday, you knew who you were: you were a Founder. You felt at home in the jargon and buzzwords of the entrepreneurial ecosystem; you knew how to behave at meetups, with VCs, and with your team. You learned that you have to move fast and break things, jump off the cliff and build a plane on the way down, and many other feel-good slogans. You were a Founder and it felt great. And now?

What do you call someone who has fought in just one battle? A veteran. Someone who competed in just one olympics? An Olympian. You, my friend, are still a Founder. Except you have been given a present: the present of perspective. You have the privilege now to look back at what you experienced in starting your company, in running it, in raising money, in going to those meetups, in signing those clients and in all the endless administration. Those are valuable skills.

You now have the freedom to take stock, from your perspective. You no longer have to act the part of the founder superhero. You can look back and reflect. What did you like? What did you love? What made your blood boil? Most importantly - what made you feel authentic and what made you feel fake? 

Our recommendations for this stage are:

Professional Outcome: Train your reflective muscle, so that you are able to point at what you want to keep with you and what you want to evolve.Take the time to articulate what is different about your own personal and professional capacities. Give a name to what you are taking with you from your entrepreneurial experience: insights, experiences, resources. In particular, do not be scared to reach insights which are radically different from what is accepted in the entrepreneurial arena.

Emotional Outcome: Develop a new sense of self, not based on belonging to the group of startup founders, but based on your core values and personality. Your social and professional environment does not have to define you. You have control over how you want to define yourself.

Lapsed Founder Tips: A large challenge for many at this point is to separate their identity from that of the stereotypical founder. Paraphrasing James Clear, this is the stage where you redefine yourself based on your core identity but not on your role as founder.  For example: “I am a founder” becomes “I enjoy building and creating in a business context”. 

This is a great time to reconnect with old friends and old hobbies and pastimes to reconnect to your core identity. 

Stage 3: Evaluate Your Assets 

May I ask you a riddle? What do you call a piece of metal that has been beat up one thousand times, burned, boiled, broken and welded back together? The only weapon from Beijing to Vienna to withstand the Mongols - the largest empire in the history of Earth - The Katana.

You my friend, are a Katana. Forged in the heat of 1000 unique startup experiences, you have unique value to every future endeavor, whether you choose to look for a job or start your next company. 

Here are some simple examples:

• You have a broad understanding of different professional fields - product development, marketing and sales, finances, etc and can therefore easily work with other professionals.
• You are goal-oriented: you know what it means to work hard, and to try to reach a clear outcome - not just to “do your job”.
• Your entrepreneurial skills can serve any company which is looking to start a new project or develop a new product. You know what it means both to work macro - on strategy, roadmaps and budgets - and micro - day-to-day management, tiny features tweaks, work with providers.
• You have grown an expertise in whatever market your startup was, and can bring your expertise to future employers, clients or ventures.

Before battling the Mongol cavalry (aka job hunting) we suggest the following preparation:

Create clarity with regards to your professional value and with the value of your past experiences. Here is where you prepare the narrative to explain your value, when you see fit to do so. 

Two questions should guide you here:

1. What skills, connections, knowledge etc. am I taking with me to the next phase of my career?

2. What guidelines should I give to myself in order to perform even better?

Actually open a spreadsheet and start writing, do not dismiss this as a fleeting thought during your next coffee break.

Some of the answers will be very technical. Keep asking yourself why is that valuable or helpful. Apply your customer discovery skills to yourself here. You will get to an inventory of tools that can serve you as your new professional tool chest. It will give you the confidence to start making some new steps in the market, and to present yourself in an effective way. 

Also, if you take a look at the spreadsheet after you have filled it in, you will be able to notice some patterns: in what fields do you have more expertise? Are there clusters of skills that are particularly valuable or unique? How are you evolving as a professional and where could it lead you? 

Professional Outcome: Compile a spreadsheet with your list of personal and professional assets. Try to align them in one consistent narrative, one that is genuine and accurate to who you are as a professional. Click here for a template.

Emotional Outcome: Know your worth! Start building your self confidence back up. 

Lapsed Founder Tips: Now is a great time to both learn new things and to teach others. This can be a new hobby (did I mention I started gardening?) or a new skill. There are many online platforms for learning new skills. Once you start learning, you will see how the joy comes back to you and the ideas start to flow.  

Stage 4: Scout the Market

Most of the work we have done so far was directed inwards. We took the first steps in reconnecting with our selves and disengaging from aspects of our previous status, culture and routines that no longer serve our needs.  

At this point you will have a clearer picture of what you would like to leave behind and what you want to take with you to the next step. 

The new challenge, then, is to explore the opportunities available or those you wish to create. 

Stage 4 is all about discovery. Go out and collect data about what is happening in the market today. Toy with many different possibilities, without trying to make any decisions. Yesterday you were the artist, desperately waiting for a hit. Today you are the record producer, sampling all the available demo CDs coming in. 

There are several ways to carry out this research, here are some suggestions:

• Reach out to people in your extended (not close) network. The best opportunities come from them. 
• Explore new content channels.
• Try to meet people in a similar situation and share information and insights.

After a period of exploration, you will be able to “try on” new professional identities - as potential employees, partners, clients, or, once again, founders - but with a more focused approach to it and without the unhealthy pieces of it.

Professional Outcome: Research several new business opportunities as well as several roles. Push yourself to carry out broad market research. 

Emotional Outcome: Internalize that there are still many roles which are suited to your needs and capabilities. You are valuable. 

Lapsed Founder Tips: In the words of Mel McDaniel- “You can’t play the blues in an air conditioned room”. Open yourself up to new experiences and opportunities. At the least, go sit in a new coffee shop. Take up a friend on their offer to pay them a visit. If you can, travel to a new city. Physically placing yourself in a new environment gets the creative juices flowing. 

Stage 5: Chart Your New Course

This is the stage where you understand what is required from you in order to get ready for the next phase of your professional journey. It might be upskilling in a specific field, finding the right consultant or searching for a specific job or co-founder.

In order to move forward, jot down a short-term vision for how your professional life can look a year from today. It does not have to be one definite answer, quite the opposite - it should include a few alternative scenarios. For each one of them, note what it requires from you, and whether those are efforts you are willing to make. Also, note what you need from the people around you, and whether you feel comfortable asking for their help and support. We want to make sure that you enter your next stage from a position of confidence and grounding - especially from a professional and financial perspective.

Professional Outcome: A written list as follows: a few scenarios for how your professional life could look in one years time; for each of these scenarios write down the resources you will need to achieve them, both personal and from your network. 

Emotional Outcome: Feel comfortable and potentially optimistic about moving back into the working world, at your own pace and on your own terms. 

Lapsed Founder Tips: As a founder, you have spent a lot of time explaining why your idea will work. You had one startup and you needed it to be a success. You are now in the opposite position; you have many ideas and you do not want to waste time on ones that are not right for you.Make a list of your ideas and experiment with them. If some of them feel unnatural or forced, discard them. Be ready for new ideas as they come up.

Stage 6: Implement Your Insights 

Kintsugi - The Japanese philosophy built on the idea that in embracing flaws and imperfections, you can create an even stronger, more beautiful piece of art.

 The next step is up to you. 

Don’t expect it to be easy. 

It can be tough to breathe at the top of the mountain. A fog has descended and you can no longer see the peak. Most people stay in the foothills, but you - rejoice in the fact that you are  daring to climb. 

We should not expect our next professional venture to be a quick hike. It looks much more like a journey of a thousand miles. Think of all that you have been through until this point in time: your triumphs and failures for sure, but also all of the challenges you have already overcome. you have got this. 

The peak is there, waiting for you, and everyone’s peak looks different. When the fog lifts, and it will lift, you will be on your way to a new, exciting peak. 

We hope that this article and these phases will help you get through the tough place you are in right now. Please feel free to reach out at: 

Motti Sigel

Avy Leghziel

Thanks for reading