Start-Up: What Doesn’t Kill You Makes You Stronger

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Kelly Clarkson is a recording artist that has risen from being unknown on American Idol to one of the most popular stars of this decade selling millions of records and winning countless awards. Likewise, northern Nevada’s entrepreneur landscape has risen from being unknown to a hot scene this decade. Clarkson’s song “What Doesn’t Kill You Makes You Stronger” is a motto that is often used in many contexts, and a motto that aptly describes northern Nevada’s entrepreneur market over the last decade.

Northern Nevada was hit hard by the Great Recession (the GR). We have heard and experienced the negative consequences of the downturn in the local economy. There are positive results, however, that have stemmed from those dark days. Many new companies have been formed this decade. The increase in unemployment from the GR provided a stimulus and motivation for local entrepreneurs to take the giant leap of faith and start their own businesses. These businesses, and ones that existed before them, have had to survive in extremely challenging times. Trying to grow a company when the local economy is suffering is difficult, to say the least. One major challenge for emerging growth companies has been that investor money became quite scarce.

It is never easy for emerging growth companies to raise money. But during the GR, it was almost impossible. There may have been more investment money floating around prior to the GR, but since the GR, investor money has almost entirely been gone. Because of the absence of funds, local companies have had to bootstrap and pinch pennies to survive. It has resulted in leaner and meaner companies that can weather storms. Further, entrepreneurs approach the concept of investor money differently now that they have weathered the GR storm. No longer does an entrepreneur start a company and feel an entitlement to investors, or assume that the company will be funded (which often was the case before the GR). Self-reliance has become the new norm and this creates companies that are better suited for funding and more attractive to investors. As we emerge from the GR with stronger companies and entrepreneur self-reliance, investment money and opportunities will increase. Even if an entrepreneur failed during this time period, or at any time at all, those setbacks can have a positive benefit.

Almost all entrepreneurs fail at some point. This can be devastating in many ways, but it also can make you a better business person. The lessons you learn going through difficult times cannot be taught in books. You have to live through it to truly appreciate and learn from the experience. Investors often tell me that they would rather invest in a good idea that has an excellent, experienced team, rather than a great idea with a mediocre, unexperienced team. You can’t know it all unless you have been through it all. The School of Hard Knocks has been in full session in Northern Nevada, and the experiences that entrepreneurs have gained have been invaluable. Just as important, this knowledge and experience is being shared freely within the community.

In the last decade, we have seen the creation of many support groups and organizations designed with the purpose of helping local businesses succeed. Local angel groups such as the Sierra Angels and Reno Angels are resources that can be leveraged for more than just funding opportunities. Local and state politicians have demonstrated that start-up businesses are a priority and a worthwhile platform. The supporting infrastructure needed to enhance emerging growth companies, including law firms, accountants and other businesses, is more developed now than at any time in our history. The level of sophistication surrounding the whole entrepreneur ecosystem is raising at a rapid rate, and Northern Nevadans all along the way are willing to help and are striving to make the entrepreneur scene a huge hit. It is this sense of community, spirit, and cooperation that truly makes Northern Nevada stand out and will keep our local entrepreneur market climbing the charts to new heights.

The last decade has thrown many challenges at local entrepreneurs and their businesses, but they have learned valuable lessons, become more self-reliant and stronger at operations, and are willing to support each other in multiple ways. Like Kelly Clarkson poetically sings, “You didn’t think that I’d come back, I’d come back swinging. You try to break me, but you see — what doesn’t kill you makes you stronger, stand a little taller.” This is Northern Nevada’s entrepreneur scene.

Fritz Battcher is a partner in the Reno office of Holland & Hart. His practice focuses on helping start-up and emerging growth companies at all stages of their lifecycle. He can be reached at FBattcher@hollandhart.com.