In the Trenches: What Raising a Kid & Raising a Company Have in Common

During a recent phone call with the CEO of one of our portfolio companies, he jokingly compared the early days of raising a kid – particularly when you’re still in survival mode with a newborn – to the early days of building a startup. 

“Don’t worry, you’ll forget how hard it is,” he said. 

He’s a dad and a founder, so he gets both worlds. While I’ve been on the operator side before at very small, very early-stage venture-backed startups and I also have a little one, full disclosure that I’ve not been in the founder seat myself. However, these views are informed by what I’ve observed and the stories I’ve heard from the founders of growth-stage software companies in our portfolio at Straylight, founders of early-stage companies I’ve met with over the last six or seven years in the Michigan entrepreneur ecosystem, and even informed by my husband who was part of a co-founding team that worked on creating and bringing an innovative medical device to market. 

So, what does taking care of a newborn and building a startup have in common? 

Stayin’ Alive: Some days (every day when they are a newborn?), it just feels like all you can do is try to stay alive. Feed the baby. Change the baby. Rock the baby to sleep. And repeat. These are the days that are really, really challenging. You’re not sleeping. You’re so exhausted your body aches. Days bleed into nights. You never know what time it is. You’re just focused on getting through. In hindsight – it’s beautiful because you’re giving your little one everything they need in life: nutrition, comfort, love. But in the moment, it sure feels tough and sometimes all you can manage to do is make it through. My little one has recently started making the sound of “ah ah ah ah”, so naturally, we start dancing and singing the Bee Gees “Stayin’ Alive” song to her when she does that.

The Terrible Twos: The “Terrible Twos” is the nickname for the developmental stage  that a kiddo goes through around the age of two, often accompanied by temper tantrums, big emotions, and lots of frustration. It makes sense – your toddler is experiencing an immense amount of both physical, emotional, and intellectual growth during this time of their life. And – I hear – this results in your little one figuring out how to manage their feelings, communicate things, and explore their physical boundaries. Achieving $2 million in revenue for your startup is a lot like going through the Terrible Twos: big emotions, lots of frustration, and - I imagine - often a temper tantrum or two. Straylight invests right after this “terrible twos” revenue stage – and not because we want to avoid helping founders navigate through this time, but because surpassing $2-2.5 million in revenue is often where the company achieves product-market fit and where we feel our value creation resources can best help the company mature and scale. 

Have Your House In Order: When you’re expecting your first kid, one of the bits of advice you read about is having your financial house order, meaning, having a kid is really expensive: the diapers, the wipes, the bottles, the 15 different types of pacifiers and sleep sacks you have to try to find something your baby likes, not to mention the clothes they grow out of it two weeks and the tremendous cost of child care. You are advised to have a budget going into it and an understanding of the expenses associated with raising a kid. Startups need to have their financial house in order too: clear accounting policies and practices, clean reporting, and easy to understand financial and operational dashboards. Not only do these help the management team track the business and monitor the P&L, but these are necessary for raising venture capital. 

It Takes A Village: You hear this saying a lot in relation to raising a child, and it’s actually quite beautiful. Some say it originates from an African proverb that emphasizes the importance of the entire community when raising a kid. Not only because the early days are difficult and family, friends, and neighbors can help lessen the burden by helping the new parents, but also because as a child grows up, they are influenced by the people around them. The same is true for building a company: it’s a heck of a lot easier if you have support and don’t try to go it alone. Whether it be additional co-founders, other entrepreneurs, advisors who have been there and done that before, board members, and yes, even investors. Michigan has a pretty incredible ecosystem of entrepreneurs and investors, and I think that is somewhat unique to entrepreneurial hubs in the Midwest. It’s special when you can attend an event or conference with other founders and investors and recognize a lot of friendly faces there. Especially at the really early stage, a strong ecosystem or community of support for entrepreneurs can help startups thrive and survive. 

Late Nights & Long Hours: The number one advice I give friends or acquaintances is sleep AS MUCH as possible before the baby arrives. And I mean it. The week our little one was born, I don’t think I got any sleep for five days. I’m not kidding. And it’s not much better once you’re home from the hospital because you feed and change the baby every 2-3 hours. The same is true when you’re building a company – there are a lot of late nights and long hours. I know a few CEOs right now who are in the trenches both in their companies and have recently had a little one and I don’t know how they do it – they are true heroes in my book. 

You Have to Get Good At Storytelling: I never thought I would be the silly type of parent, but boy was I wrong. You spend a lot of time with a little one making up stories, making up songs, and reading books. Before and while your little one is learning to talk you even spend a lot of time just narrating what you are doing around the house. When I was a little kid, I would always ask for more stories – more “once upon a times.” This skillset of telling a good story translates so well to being a founder: you have to get good at telling the story of your company. How did you get your start? Why are you uniquely positioned to found this business? What is your startups origin story?  

A Labor of Love: Parenting and founding a company are both labors of love (although obviously very different types of love). You pour your all into it. Having a newborn is the hardest thing I’ve ever done, but I wouldn’t trade it for anything. Raising a little one is also the most wonderful thing I’ve ever done. There’s the joke that a founder’s company is their baby and they are always going to think their baby is beautiful. But it makes sense: you created this business and breathed it into existence, so of course you are going to love everything about it. 

Building a company from scratch and becoming a parent are journeys that are both exhausting, exciting, and deeply human – and both help teach you that growth is not linear or easy, but always worth it. Of course, I know that raising a kid and raising a company aren’t exactly the same – though both have been known to be messy at times and keep you up all night – but maybe the comparison isn’t that different? Both require patience and love, to ensure they thrive. 

‍Michelle Erikson is Vice President at Straylight Capital. Her role involves assessing the health and scalability of potential investments, and supporting the growth of portfolio companies. Prior to Plymouth, she led marketing for the University of Michigan’s Athletics Department and worked for a venture-backed sports accelerator. While not a Midwesterner by birth, she has adopted us lovingly as her home: she loves Euchre, the Upper Peninsula, and driving by corn fields on her commute.