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I had all of my capital held up in Silicon Valley Bank as it collapsed. It showed me that the grittiest entrepreneurs will survive the VC winter


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Last weekend, Silicon Valley Bank, the most popular bank in the tech industry, collapsed overnight. Following a sudden stock price stumble, thousands of depositors lost faith in SVB’s liquidity and attempted to withdraw more than $40 billion in the space of a few hours. I was one of them, as were many of my fund’s portfolio CEOs.

The 48 hours that followed were frantic. Everyone’s bank accounts were frozen. The possible downstream consequences were nothing short of existential for individuals, companies, funds, and the entire industry.

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As a venture capitalist with all of my capital and a third of my portfolio exposed to the crisis, it’s hard to describe what the experience was like. Amidst all the uncertainty, I lived two simultaneous realities. One part of me was “on it,” focused on what I could control, taking every possible step to safeguard the fund, while simultaneously keeping my kids fed, my team calm, my investors updated, and my portfolio and community supported. The other part of me worried we were all doomed and apologized to my husband for putting our family through this for so long.

“I literally ran to the bank in downtown Seattle,” said Grin Lord, the CEO of portfolio company mPathic. “It was tragic and surreal watching the branch employees realize they might not have a job very shortly, all while trying to fax requests for cashier’s checks. It occurred to me that I was in a moment I would remember forever.” Lord’s attempt to get her money out did not succeed that evening. By Friday morning, federal regulators had taken control of the bank. While the FDIC promised to make insured funds available to depositors, it was unclear how much could be recovered and when.

Then on Sunday afternoon, with a 346-word press release, the worst of the crisis was over, just like that. It was like getting hit by a truck, brushing it off, and limping away. “I feel like as a startup CEO you just learn to keep going no matter what happens,” Clara Siegel, the CEO of another portfolio company, who spent all weekend in crisis mode, told me. “Is it weird that I feel “normal”?” another CEO, Melinda Haughey, asked. “We’re used to having curve balls thrown at us. Doers just have to wake up the next day and get back to doing.”

Type 3 fun
My husband is a climber. He often comes back, stinky and exhilarated, full of endorphins and a new collection of bruises. When I ask what happened, he says, “I’m OK. Just a bit of type 2 fun.”

This is how I learned about the fun scale, an extremely useful way to rank activities by their fun-to-suffering ratio.

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The scale starts at type 1 fun: easy, known, enjoyable-while-it’s-happening fun. It’s your favorite movie, brunch with good friends, or delicious ice cream on a hot day. It’s the kind of fun that fills up your tank. Throw in a little bit of challenge and you have type 2 fun–or as I like to think of it, fun in retrospect. A hard workout, trying to write your first novel, camping when it’s cold and wet.

At the other end of the scale is type 3 fun. Type 3 is actively miserable, “what was I thinking,” “someone talk some sense into me if I ever want to try this again,” not actually fun at all. If type 2 is a hard workout, type 3 is an Ironman. It’s childbirth (with or without the epidural). It’s that old TV show Fear Factor, where contestants had to eat live scorpions. It’s the most taxing and painful self-inflicted challenge that hurts when you’re going through it but becomes a badge of honor when it’s over. The harder the challenge, the more it builds you up.

In my experience, the most prolific repeat sufferers and enjoyers of type 3 fun make for the best entrepreneurs. There’s a masochism to starting and scaling a company that favors founders who can delay gratification and go through unbelievable difficulty in the process. The best entrepreneurs I know will face a hundred insurmountable obstacles–and come back for the 101st because they actively believe that with enough time and opportunity, they will come out victorious.

The real toll of being addicted to adversity
Entrepreneurship is hard, sometimes comically so–and the better you are at type 3 fun, the better your odds of eventual success. But that same doggedness that drives entrepreneurs to keep going can also make you numb, unable to process hard experiences.

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At the extreme, this great strength becomes a great weakness. It is in no small part why so many founders struggle, and why it’s so critical that entrepreneurs and their investors prioritize mental health and well-being. Especially at times like this.

These days, a new generation of entrepreneurs is facing their first VC winter, and a new generation of VCs is facing their first LP reckoning–and that was all before the tech industry’s most important bank collapsed before our eyes.

Journeys that were hard a year ago are beyond grueling today, and with all the economic uncertainty, it’s unlikely that things will get easier soon. But whereas the frothy market of the last five years favored the best-connected founders who were also best at pitching, this new moment will favor a new type of entrepreneur. The grittiest ones. The ones with purpose. The ones who will get up time and again, who will brush off a catastrophic crisis, who will doggedly pursue their dream and are determined to succeed come hell or high water, whether it is on this startup, the next one, or the next.

I’ve started two companies, raised a VC fund, birthed two babies, and quit a pack-a-day smoking habit cold turkey. In other words, I’m no stranger to self-inflicted hardship. When I find myself going through those unbelievably hard moments, I think of the fun scale, and remind myself that type 3 fun is, in fact, fun, albeit not in the moment.

Like anything else in life, the key is to strike balance: Type 1 fun is restorative. Type 2 fun gives me energy. And type 3 fun, as hard as it is, is where I find my purpose.

It’s not easy. It’s not glamorous. It’s a grueling, mostly thankless slog. But as long as it feels worthy of my one and only life, I wouldn’t have it any other way. That’s why I know that one day, I’ll look back on this harrowing weekend and remember it as epic. After all, when were you last proud of doing something that was easy?

Leslie Feinzaig is the founder and managing director of Graham & Walker Venture Fund.

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