I have seen my fair share of entrepreneurs that were “all in” – mortgaged their house to the max to get their start-up going, using their credit card limits to make the next payroll, close to personal bankruptcy at any moment.
There are probably tens of thousands of cases where this strategy was successful: the new funding came in just before the lights finally went out, the closing of a big sale brought in new revenues, a line of credit was extended. These are the stories we mostly hear about. But there are millions of situations where this “all in” strategy did not work out and the entrepreneur was left with nothing at all, having lost their company, their house and sometimes even their family (that didn’t want to share that type of life anymore).
Taking risks is the key to entrepreneurial success and I have an incredible respect for people that invest a large amount of their own money into their start-up. But in my opinion it is about taking measured risks and not going “all in”. If you are “all in”, you often take bad decisions as you are not able to cope with the pressure from your family or your company anymore. Or you take bad decisions because you run out of alternatives and time.
So take a measured approach and never invest all of your money in your start-up but keep enough dry powder in case things don’t turn out as planned. You will be a better entrepreneur and family man.