Tenacious Ventures’ Sarah Nolet on facing your fears in a tough fundraising climate

Last week, I overheard a founder admit: “It’s just really hard to think straight, let alone fundraise, when the world is burning to pieces around us”.

They were being hyperbolic, but it makes sense. It’s tough out there, especially if you’re fundraising.

Some companies can afford to wait things out; others have ended up with bad timing and do need to raise, despite the macro environment.

No matter why you’re raising, with market conditions driving everyone to peak levels of uncertainty and doubt, it’s scary. The fear — of failure, embarrassment, loss, whatever — can creep in. When it does, paradoxically, it leads to bad decisions and even worse outcomes.

It’s tempting to bottle up the fear. Drown it with optimism. Or numb it with grit and hard work. But the best way I’ve found to turn fear into an advantage is to confront it, head-on. Confronting my fear uncovered the real emotion I was avoiding, and in doing so unlocked a truly deep source of fuel for my fundraising journey.

Rational decisions don’t exist

There’s no such thing as a purely rational decision; all decisions are emotional.

So why do I, and all the other aspiring high-performers I know, resist our emotions and stubbornly try to think our way through problems?

Because doing hard things — like raising money in today’s world — is scary.

It’s normal to be scared. Yet, I know that when I act from a place of fear, I see fewer options, waste energy fighting down the fear, and even talk myself out of good options. Sometimes I think the investors on the other side of the table can even smell the fear — not exactly the ideal conditions for raising.

There is an antidote to these imposing fear cycles. Lean in. Love it. Turn fear into an ally.

The only way I’ve found to do this is to dream up the worst-case scenario and pre-feel all the feelings that come along with the nightmare.

Emotional scenario planning 

Scenario planning is a great tool for preparing our logical brain, but the problem is it’s all logic and no emotion. To overcome fear, I need to feel the scenario to make breakthroughs.

For a founder, this might be exploring what it would feel like if you… take a down round? Lay people off? Tell a customer you cannot deliver on a contract? Can’t raise? Fail and have to wind up your company and get a job?

Would you be embarrassed? Sad? Pissed off?

To push past the logical brain, you have to dig deep and confront failure and loss. You have to feel it!

Facing my fundraising fears

Here’s a story you never hear from investors: after soft “launching” with our first Fundraising Out Loud post last year, we thought we would get to the first close of our second fund before Christmas. But we didn’t.

Coming into this year, market conditions were still horrible, but we had some unexpected inbound interest from institutional investors. We were also seeing really great companies and made some new investments (more announcements coming soon!). So we decided to largely push pause on actively raising (and raising out loud) for a bit.

But coming into June, fundraising momentum picked up and we started to ask: should we schedule a first close?

This was a scary prospect. What if we tell people it’s happening, and it doesn’t? What will they think? Will they lose confidence and walk away entirely? What if we have to fully pause on raising, or even fail entirely to raise a second fund?

As I tried to live in these possible futures, I felt some obvious things: my cheeks burning with embarrassment; my shoulders caving and my chest tightening with sadness.

But I also felt something unexpected: anger. In this hypothetical future of failure, I was pissed.

The planet is literally burning, and we’re not going to invest in one of the highest potential impact areas? We’re going to leave the money on the table, so we can wait and see how it plays out? Facing the most unprecedented — yet certain — crisis of our time, we’re going to ask about comparable returns from the past decade rather than realise the upside of acting with conviction? We’re going to play it safe and miss out? Really?! 

In my anger came the clarity that I was trying to control a whole bunch of uncontrollable things, from whether and when our Fund I companies will raise or exit, to how overallocated investors are, to what people will think of me for publicly backing something contrarian that I believe in.

My fear was clouding my purpose, crowding out my conviction. And I was letting the poor macroeconomic environment creep in as an excuse. When I felt my feelings, the next step was obvious.

Tenacious exists to change the world and to make money doing it. We can’t wait. There’s never been a better time, nor a higher potential industry than agriculture, especially in Australia.

I cannot control what will happen, but in facing my fear I realised the only real failure would be not to try. So our next step is a first close in September because the world isn’t going to wait.

Sarah Nolet is a co-founder and general partner at Tenacious Ventures. This article was first published on the Tenacious Ventures website.