So on Friday I got into a little Twitter thread about my response to Aaron Hillegass's anti-entrepreneurial blog post. Seems that some folks were having an issue with my use of the word "mediocre." It is never my aim to be mean spirited or offend. Poor word choice.

I wrote my response post before Nelson Mandela passed. When he did I saw this quote for the first time. It also came up in the Twitter discussion on my post.

There is no passion to be found in settling for a life that is less than the one you are capable of living.

                                                    Nelson Mandela

Mandela better and more succently expresses what I was trying to articulate.

So Aaron Hillegass who started Big Nerd Ranch got the entrepreneurial community all in an uproar with his post "Don't Start A Company, Kid."

The article is directed toward soon to be college graduates that BNR is trying to recruit. And while I disagree with the rationale that Aaron presents I actually agree with his conclusion. For the vast majority of college graduates the best thing to do is get a job. Get some real world experience. Pay down those college loans. If starting something is your thing look for some opportunity in the marketplace that your company or client is not willing to execute against. The insider idea.

The biggest issue I have with Aaron's logic is this statement:

Having Enough is awesome. How would I define “Enough”? Enough means that you can take a friend out to a nice lunch and not have to worry about how much it costs. I have hung out with a couple of billionaires—my experiences indicate that being a billionaire is just incrementally better than Enough.

Thus, as you look at your future, the question should not be, “How can I become a billionaire?” You should ask, “Where can I get Enough?”

I am calling BS.

For many people, myself included, having enough is not awesome. It is not going to help me achieve my goals. For some it is. Not me. And not for most entrepreneurs. Having enough to me sounds a little like being mediocre. And if you want to create wealth having enough is not going to do it. You can not create wealth from personal income.

Last night I was reading The Everything Store: Jeff Bezos and the Age of Amazon. This is Bezos talking about walking away from his very high paying Wall Street job to start Amazon:

“I knew when I was eighty that I would never, for example, think about why I walked away from my 1994 Wall Street bonus right in the middle of the year at the worst possible time. That kind of thing just isn’t something you worry about when you’re eighty years old. At the same time, I knew that I might sincerely regret not having participated in this thing called the Internet that I thought was going to be a revolutionizing event. When I thought about it that way… it was incredibly easy to make the decision.”

So go to work for Aaron or some other company. Learn. And when the time is right. If it is right for you. When you find that thing that you might regret not doing when you are 80. When you find your revolution. Go do it.

Or you can have enough. I hear it is awesome.

So a bright young entrepreneur walked into my office the other day. Interesting market. Has assembled a team. Built a product. Has significant user traction. And revenue. 

He was looking to raise $400k with a pre-money valuation of about $1.6 million. Seemed reasonable to me. Asked me if I wanted to see his PPM. Uhh, not really.

A PPM is a private placement memorandum. And in my opinion they should never be used by an early technology startup to raise funds. There are three reasons for this.

One is that they are costly. Just for the sake of discussion it is going to cost somewhere between $10,000 and $20,000 to get a real attorney to create a PPM. An argument could be made that the cost will be paid for out of the investment but investors rarely pay the attorney fees for a startup raising money. More often than not it is the other way around. The startup pays the investors' attorney fees.

Two, and perhaps much more importantly, generally speaking sophisticated technology startup investors do not invest in startups that have created PPMs. Angels and VCs tend to like to negotiate their own terms and have the round written on their own paper. When the startup has a PPM with checks already in it becomes too difficult if not impossible to get the types of terms they want in order to invest. Bill Payne has a nice post explaining the problem with private placement memorandums.

Three, sophisticated technology investors don't think entrepreneurs that have created PPMs are very sophisticated. 

In all my time coaching entrepreneurs on raising money I can not recall one doing so via a PPM. They cost money and scare away smart investors. Just say no.