November 9, 2009 - Beware the Dreaded 'Entrepreneur's Anxiety Disorder

You may have noticed over the past few years that new "disorders" seem to be popping
up almost daily. Some of them are becoming pervasive.

Seeing as it's only a matter of time until everyone is diagnosed with one affliction or
another - for example, statistics show that more than two million prescriptions for
attention deficit hyperactivity disorder (ADHD) drugs were written in Canada last year - I
believe I've identified a new disorder affecting me and many of my entrepreneurial
friends.

Entrepreneur's anxiety disorder (EAD) has now become a leading cause of death for
small companies in the Ottawa area. It has grown unchecked in our business community,
sometimes even encouraged by the media as Ottawa companies get snapped up by
outside interests. EAD causes entrepreneurs to sell their businesses long before they
should, never realizing the full value of what they've worked so hard to create.

Risk factors
I've identified the following risk factors which could lead to EAD, but don't necessarily
result in testing positive for the disorder: overwork and a lack of willingness to delegate
tasks to others; conflict between founders and partners; insufficient funding to bring a
new technology to market; some measure of financial success and, finally, frequent
contact with U.S. and International business colleagues.

I know people who are currently facing the above factors, and some who are at
significant risk of selling their companies. This isn't always a bad thing. Some of the
above can lead to unhappy situations at home. A number of years ago I sold a company to
a large U.S. client, and I recall that the following couple of years were quite pleasant. I
enjoyed the work, and developed friendships with many new people all over the world.
On the other hand, on another occasion I sold my share in a company (after just two
years), which went on to have a long and interesting story. I often wonder what would
have happened if I had stuck with it longer.

Symptoms
How does a person know if they have EAD? These symptoms are often present: tempted
by the security of a reliable salary in a larger company; a desire to lock in whatever they
get for their company, in case it doesn't succeed (go for short-term lesser payout, rather
than a larger long-term valuation); a loss of ability to see the value in what they have
created; and general fatigue of dealing with employees, banks, difficult customers and the
like.

This ultimately leads to a state of discouragement causing the entrepreneur to cash out
early, selling their business too soon.

Potential treatments
I have observed that there are ways to turn down pressure without giving up on your
business dream.

Shared ownership
One idea is to consider power sharing by bringing in great people, who will treat the
company as their own. WARNING: This means you will have to let them own part of it,
but at least you don't end up giving away the whole company. I've used this approach in
my company, and it allowed Fidus to survive the telecom crash (during the first couple of
years), and the Great Recession this year - when I was especially vulnerable to bailing
out.

Consider the alternatives
Test if the security of a reliable salary is really the issue. Perhaps what is concerning you
is uncertainty about your likelihood of success. Consult with experienced business people
to help you objectively assess your situation. And be sure to talk to your friends with
"real jobs," to compare that with the excitement of what you're creating in your company.

The value of the business
It's easy for entrepreneurs to forget the potential value of what they are creating. I
remember reading a story about one of Canada's leading technology companies, in which
the journalist mused that "perhaps they should just give up." The company's stock was
worth very little at the time, and no one was certain if mobile e-mail would catch on. I'm
glad the company didn't give up.

I've experienced many times of discouragement about the prospects for my company,
only to have colleagues comment that I was "sitting on a gold mine." That was the last
thing I had in mind! It's very surprising how little we sometimes feel our business is
worth when we're in the midst of building it.

The cure
I believe if there was a cure for EAD, there would be many more companies in Ottawa
that would reach their potential. Growing a business is hard, and comes with many
challenges. I encourage those of you currently at risk of EAD to stick with it - your
business may have much more value than you realize right now.

Michael Wakim continues to battle EAD and is the founder and CEO of Fidus Systems,
an electronic product development company with design groups in Ottawa, Toronto,
Santa Clara, California, and Beirut, Lebanon.