The death of an entrepreneur: whether it is worth the price of life

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A continuous entrepreneur in Silicon Valley has chosen suicide after repeated defeats and repeated battles. Is it worth the cost of life to start a business?

Jodi Schollman, a 48-year-old Silicon Valley entrepreneur, Jody Sherman, who shot himself in the vicinity of Las Vegas this January 27, lamented the news. Sherman founded a number of companies, although each time to pay a great deal of effort, but they ultimately are difficult to escape the sale or closure of the fate. Ecomom, the last start-up company, financed $12 million trillion, still insolvent. Sherman when soldiers, repeatedly defeated and never give up, but finally chose to commit suicide. The tattoo on his wrist is: I'm great.

American Science and Technology blog site BusinessInsider through the Sherman of his former friends and colleagues of the investigation, with a lengthy report trying to uncover his choice to suicide mystery.

The following is the full text of the article:

Entrepreneurial failure discouraged

A few months ago in Sunday, Sherman originally met friends to go to the movies. But that afternoon, my friend received a call from Sherman's wife, Carrie, who said he was missing. Three hours later, Kelly called the Las Vegas police station, saying she had a bad feeling about her husband's accident.

11:12, police in the car near Nevada State Charleston Mountain (Mount Charleston), eventually found the body of Sherman, he had a bullet hole in the head, the incident to Las Vegas about 25 miles (about 40 km). The Clark County coroner's office found that Sherman died of suicide. And five days later, Sherman will welcome his 48 birthday.

Sherman suicide News in Twitter and other technology blog quickly spread, let countless people shixi unceasingly, and they also to Sherman why choose suicide confused unceasingly. He left no last words to his family. His last update on Facebook was written by his wife: "This is Jody's last message, but not from Jody himself." He's gone. It's not a joke. He's really gone, forever. He didn't say good-bye to anyone, because he knew he couldn't. So let me say it for him. If you see this message, you are in some way in contact with Jody. He loves you, respects you, appreciates you, values your existence in his life, or feels that there is some connection in these things. He wants all of you to know and understand this. Please leave here what you want to say to Jody. ”

Just days after Sherman's suicide, his company, Ecomom, convened a board meeting. At the meeting, another founder and board member of Ecomom found that the company was in fact already in a very dangerous state. A few weeks later, Ecomom shut down because of insolvency. In short, Ecomom is bankrupt.

The start-up company, which employs 28 employees, is running out of cash. Sadly, no one in the company seems to understand how ecomom can be reduced to this point. Just six months ago, Ecomom had just raised 5 million dollars, with a total financing of more than 12 million dollars.

Over the past six weeks, we have interviewed more than 10 people familiar with the matter, trying to understand what happened to Sherman and Ecomom in the last few months. Among them were his former colleagues, advisers, investors and confidants. Many of them were interviewed anonymously.

Everyone was shocked at what happened to Sherman, and a lot of people even had a feeling of being cheated. Everyone raises the question: what kind of a person is Sherman? What has changed in his life in the past few months and finally ended his life in a tragic way?

　　

The tattoo on his wrist is: I'm great.

"The Wonka of the entrepreneurial World"

Sherman is eccentric and sensitive. A friend evaluates Sherman: "He is the Wonka card of the entrepreneurial world." Wonka (Willy Wonka) is a role played by Hollywood star Johnny Depp in the film Charlie and the Chocolate Factory. Sherman has three English letters tattooed on his wrist: I am awesome (I'm great). This is a clear indication of his desire for success.

Friends say, Sherman life bumpy, experienced many ordinary people unimaginable difficulties, but these become his pursuit of success. For nearly 50 years in Sherman's life, money has always been a problem, and his decision to make a series of mistakes around money seems to have foreshadowed his direction in life.

Sherman, a childhood friend, recalls that he had cheated on insurance; when they were 16 years old, Sherman drove him on the freeway, but Sherman suddenly told him, "Fasten your seatbelt." Just finished, he came to a screeching halt, eventually caused a car accident. Sherman, the friend said, tried to make the insurance company pay thousands of dollars in this "self-inflicted" way.

After graduating from high school, Sherman not to college, but joined the United States Navy. After retiring in 1998, he started his business in California. Later, he sold the company he founded to Nbci, which is the culmination of Sherman's professional life. After the deal was completed, Sherman became vice president of the company.

Sherman then created a new company, comedy World, which specializes in online reality shows, but comedy world failed during the dotcom bust as investors ' interest in the internet disappeared. But Sherman did not falter, he invested in a number of companies, but also founded a third company.

The company's business is mainly operating charter flights, created by Sherman and three other people, and was eventually acquired by Virgin Airlines. The business was called "Virgin Charter" inside Virgin Airways, and Sherman spent two years in the company until it was shut down. "Virgin Chartered's business has been struggling because the market is saturated and it has largely failed," people familiar with the matter said. ”

During the work of Virgin, Sherman still not give up on entrepreneurship, but also deeply inspired. This time, he decided to start a company that could change the world. Richard Branson, the Virgin's boss, Branson all the proceeds from the airline business into environmental projects. Sherman admired Branson's move.

He began to explore ways to succeed on the road to entrepreneurship. Sherman noticed that some of the women around me often talked about parenting. Although he has no children, he feels that helping mothers choose safe parenting products is a worthwhile endeavor and a problem he can solve. Eventually, he founded Sprout Baby, a website that sells inexpensive, healthy baby food. This website also eventually became the embryonic form of ecomom.

Financing at all costs

Startups like Ecomom sometimes get microfinance from angel investors. The conditions of angel investors are often less stringent than those of professional venture capitalists, allowing entrepreneurs to run their own businesses independently. Of course, everything has its pros and cons. One drawback of this mode of financing is that a single investor has little stake in the company, so there is little incentive to take an active part in corporate affairs and lead it to success.

As an investment, Ecomom has few selling points, and even for angel investors, it's hard to accept the idea. Sherman a few weeks before committing suicide, wrote a letter to Silicon Valley pioneering company incubator startups. He wrote in the letter: "Think of a dude without children, unexpectedly intend to set up a home appliance business for their mothers, investors will retreat." ”

"I really appreciate this man (Jody)," he said. "I think he's really great," recalls one investor. But I think the company he started was a disaster. Like all good entrepreneurs, Sherman never gives up. In the end, with his efforts, 65 people invested in Ecomom.

Mark Suste (Mark suster) is a friend of Sherman and has invested in the company he founded. Soesterberg recently wrote: "Although I hope he will succeed, but I personally think it is not easy to make money for baby products." "To make up 2 million of dollars in start-up funds, the Manchester United, with a patchwork of 25,000 dollars, where the financing of 50,000 dollars." For Ecomom, while gaining the favor of many investors was a good thing at first, it became a huge burden in the end.

"Of course you want someone to stand up for you when things are going bad, and they will not stand idly by when you are in trouble," Sherman said in an email addressed to 500Startups. When you really need money, only those investors will be generous in writing checks. "Although there are many friends and supporters around, Ecomom's success and failure are entirely borne by Sherman alone," he said. #p # subtitle #e#

　　

Zappos CEO Hsieh (Tony Hsieh)

Las Vegas Gambling.

In the process of finding funds for Ecomom, Sherman accidentally met Zappos CEO Hsieh (Tony Hsieh). Hsieh made Zappos a giant shoe dealer and then sold it to Amazon for 1.2 billion dollars.

Like Sherman, Hsieh experienced a 2000-year dotcom bubble, but he led Zappos through the bubble. Although many industry watchers are not bullish on the electric business industry, Hsieh quietly Zappos step by step. In the process, he also proved that the electric business industry is very meaningful, can bring profits. Zappos's success has also inspired new startups like Ecomom.

Hsieh decided to use part of his personal wealth to set up a technology project at the Las Vegas Center. In order to attract the company to Las Vegas, Hsieh helped set up an investment organization Vegastechfund. A necessary condition for the institution's investment is that the start-up company must contribute to the project in the centre of Las Vegas. Typically, this means startups need to be stationed in Las Vegas.

Sherman is deeply rooted in the technology industry in Los Angeles, where he has hundreds of connections. However, Hsieh is a master of electrical business, and he may become a good mentor and investor in Ecomom. Therefore, when Vegastechfund put forward investment ecomom, Sherman readily accepted.

In December 2011, Sherman relocated the company to Las Vegas. His wife was not accompanying, but remained in California for the next 8 months.

Although Sherman publicly expressed support for the development of the Las Vegas technology industry, his friends revealed that he had never been happy there.

Personal debt crisis

After relocating the company to Las Vegas in December 2011, Sherman completed another round of financing for ecomom, including Vegastechfund and a number of investment companies in the round. This round of financing is valued at $4 million for ecomom.

Sherman is very good at finding money, but is not very good at making smart financial decisions, both in personal life and in his own business. In fact, the two are often entangled together.

Sherman's income is hard to support the life of his wife and Christina, who was studying at a medical school without a source of income. Still, Sherman is generous with money. He paid a high salary to his employees and spent 75,000 of dollars to buy a Airstream RV. He wants to drive a car across the United States to distribute food to children who are still starving.

Sherman's friends say that at the time of his death, his personal account and his company account had barely a penny left. "I know he has had many financial difficulties," said a friend. ”

Sherman and most closely related friends often borrow money from each other at a critical juncture, and the amount of money borrowed is large. Sherman always promised to repay his debts within a few months, but by the time he died, he still had a lot of debt to pay.

Sherman also did not pay taxes in time. He received a federal tax collection of $27838 in 1995, and he received a 72,000-dollar reminder in 2010. Some friends said Sherman that if the bill was ignored for a long time, the bill would automatically disappear. But in terms of tax returns, this is not the case. In the event of tax arrears, the government may seize assets, freeze accounts or confiscate personal property until the tax is paid.

Despite the poor track record in financial management, Sherman is still directly responsible for ECOMOM's financial position. He insists on doing so, even unwilling to share financial information with the company's other co-founder, Amily Blackney Emily Blakeney. Many people think in retrospect that this is a very strange practice.

"There has never been a complete disclosure, which makes me think he doesn't want everyone to see the full message," said one person familiar with the matter. If there is nothing to hide, you are an open book. According to people familiar with the matter, Sherman is the only person who can get company bank accounts and invoices. Only he knew how much money Ecomom spent each month. He linked his company account to his credit card, an American Express black card. This has caused his personal debt burden to become heavier. He refused to apply for a company credit card, but complained to colleagues after American Express called the company's expenses.

Sometimes, Sherman's personal credit card debt even reached hundreds of thousands of dollars.

　　

Sherman Ecomom, the website has been stopped.

"Liar", "disgrace" and change of mindset

In August 2012, Sherman again financed $4.7 million for Ecomom. At the same time, he quietly received 1 million of billions of dollars in debt securitization. Boston Venture Cue Ball Capital led the ecomom round of funding, with partner John Hammel (John Hamel) joining the ECOMOM board.

However, some things happened in the process of financing this round, which had a great influence on Sherman. Before this round of financing, Sherman hoped that he and others would be able to raise more money for the company. After the financing was completed, he began to call venture capital "liar" and "disgrace".

Ecomom employees said something seemed to be wrong when Sherman announced the funding to the team. "It's one of the hardest things I've ever had to do," he says. I hope there will be no more financing for a long time. ’”

Another person familiar with the matter said Sherman was full of warning when announcing the final round of financing. "He said, ' I have no reason to get the last round of funding," the person said. I did not give a performance indicator or similar information. But I did. "For what Sherman said was" done ", the source said he was not sure.

Sherman's friends and former colleagues said Sherman never lied. One said Sherman was obsessive about being honest, but he might be able to present the facts in an amusing way.

A few months before Sherman's death, an insider asked him for some data. The data given by Sherman is growing and moving in the right direction. "Sherman told me that we are actively developing new advertising strategies that will bring rewards," the insider recalls. "Sherman's statement was subsequently confirmed because Ecomom launched a temporary, unsustainable marketing campaign.

Dangerous transactions and millions of dollar losses

By the time Sherman committed suicide, that is, 5 months after ecomom financed 5.7 million dollars, Ecomom suddenly burned out cash.

Where's the millions of dollars? Only Sherman knows.

Even board members Hamel and co-founder Blakeney knew nothing about the company's condition or the reason for the suicide. A few days after Sherman's death, Ecomom issued the announcement.

A message to investors from the Ecomom transitional President Marcus Nuchi Marcus Nucci was subsequently leaked. The mail showed Ecomom was shocked by the company's situation. The date of the email was February 14, and the technology blog pandodaily this email. The most alarming of these is the following:

"After assessing the business situation, it is clear that the management team and the board need to make tough decisions." Everyone was surprised to find that the losses had risen sharply over the past 2-3 months. Corporate debt seems to have overtaken assets, a financial hurdle that makes it difficult for companies to continue their current development. For recent events, the board is negotiating with banks to determine the next step, given the 1 million dollar securitisation bank debt and the deteriorating cash position of the company. If the company is not able to get cash injections in the future, then banks are likely to immediately ask for most of the company's cash, take steps to liquidate the remaining assets, and sell assets to repay bank debt. At present, the company seems to have no choice but to shrink its business. Given the current debt, the only way to ensure that the company survives is a "savior", offering 2 million to 3 million dollars to help the company repay its debt and turn to the more profitable business model under consideration. ”

Nucci's mail clearly points out that Ecomom has run out of cash. After sending the e-mail, Ecomom posted on the website that it had "started a task for lenders", a claim equivalent to a bankruptcy petition.

Information from the Secretary of State of California confirms the state of Ecomom. The company Michael Medi Michael Maidy, co-founder of Sherwood, as an agent. Sherwood is good at cleaning up the business of the technology industry start-up company.

There are others who understand the financial situation of Ecomom, including the consultancy firm Optima Consulting's External Auditor Dalin Malinov (Darin Mrinov) and an internal auditor. Malinov declined to comment on the state of ecomom by lawyers. But others say the auditors are not really sure how bad Ecomom is.

According to people familiar with the situation, in December 2012, Ecomom's company account had about $4 million trillion, and by the end of January there were only 400,000 dollars left.

So where did the money go? #p # subtitle #e#

　　

Sherman frontal photo

October meeting and the battle for dangerous work

Ecomom, a Groupon-like group-buying site, has been compromised. His generosity and service won the favor of the users.

But while bringing benefits to users, these deals are eroding ecomom bank accounts.

It is easy to think of group buying and vouchers as a simple promotional tool. But the financial impact of companies using this approach is more than just losing a little revenue.

Groupon and other group buying companies will charge users upfront, and then gradually pay the money to the merchants involved in the purchase. Although the specific terms vary, the merchant usually gets the money 15-90 days after the transaction is cashed.

Some distressed companies also use online coupons as a way to get cash flow quickly. In this case, group buying can be a form of financing, albeit with high costs. First, businesses need to give a high percentage of discounts, thereby compressing profit margins. Then, the income after the discount will also be split between the buyer and group purchase site.

Well-funded enterprises can repeatedly attract the same group of users through group buying until they finally become loyal "full price users". Companies that are not short of money can even afford to make short-term losses from group buying. But Ecomonm's money is not plentiful.

For example, Gilt groupe, one of the leaders of a new generation of e-commerce companies, has financed more than $200 million trillion. Fab, a website for E-commerce design, has also financed 171 million of dollars. Ecomom's total financing is only $12 million trillion (11 million US dollar equity financing plus 1 million US dollar securitised bank notes).

Since the voucher cost is so high, why is ecomom so dependent on this way? What happened to the four quarters of the company that sank deeper into the mire?

Last October, Sherman convened a meeting of the executive team.

"How much revenue can we get in 2012 years?" He asked.

The answer: about 2.3 million dollars. Sherman mused for a moment and said it was unacceptable. "If it's less than 4 million, the board will fire me." "he said. So, people start brainstorming, they all believe Sherman often say a word: "Don't worry about money, this is in my control." ”

So they figured out a way to boost their revenue: they're going to have 40% discount on their shopping season, and they'll be complemented by more discounted vouchers. It will be an irresistible promotion.

The facts are indeed what they expected.

By the end of the year, the company's total revenue reached $3.7 million trillion, with more than 1 million dollars coming from aggressive promotions. Of course, this has also caused a huge impact on the company's profits.

Revenue growth did not keep Sherman's job. Multiple sources said he would be forced to leave, probably at a board meeting scheduled for his suicide that week.

　　

Sherman's Facebook shows the "first meeting" with John McAfee, the founder of antivirus software McAfee John Macfield.

Guatemala's elaborate scam

In the fourth quarter of 2012, the last few months of his life, Sherman spent a remarkable time in Guatemala.

He told people that it was because he wanted to open a new office in Central America at the suggestion of shareholder arranges fund. He said the office would reduce the company's operating costs.

The office did open and several junior staff were found. Sherman goes there at least once a month, sometimes in a hurry, and gives the company a huge bill.

Sherman followed arranges fund's recommendations partly because the latter planned to inject new capital into Ecomom. However, people familiar with the matter said that the fourth quarter of the day, arranges fund decided not to invest in the company. The decision, and the loss of a previous radical promotion, left Sherman at a loss. He fell into despair and became desperate for money.

It was this desperation that led Sherman into a scam, a person familiar with the matter said.

During Central America, Sherman had secretly contacted McAfee, the founder of Antivirus software, John Macfield (John McAfee). It coincided with a public struggle between McPhee and the Belize and Guatemalan authorities.

McPhee now says that in those months, Sherman was caught in a carefully woven scam.

According to McPhee, Sherman was told that he would be rewarded handsomely if he could put a sum of money into a poorly-known local project. But after Sherman investment, he never got the money back. We cannot confirm the truth of the news Now.

"I told Jody that all the crooks were rubbish," he said. I told him to hurry home. "It's a very old-fashioned scam," McPhee explained by email. I said to him, ' they won't do anything. Forget your initial investment and don't want to come back. ' I told him to take it as a lesson, to pay the tuition, just a little expensive ... I'm 67 years old and I've been through a lot, so I'm not going to do that. But still, my life was almost destroyed by retribution. Jody was young and easily fooled by greed-I told him to leave Guatemala and not come back. ' But he didn't listen to me. ”

McPhee is often a loose-lip, so his description may be subject to much questioning. But people close to the insider confirmed that they did have contacts abroad.

Sherman, who lived in Guatemala City's hotel, posted a picture of McPhee on his Facebook. The photograph was taken on December 4, the day before McPhee was arrested. Although Sherman said it was the first time they had met, McPhee said it was the last time.

　　

Sherman and his wife, Kerri, were married for 7 years.

Is it worth suicide to start a business?

Although some people have long known the capricious character of Sherman, his death is quite shocking. As a man who has overcome many difficulties, his suicide is bound to cause many people to ask.

Some people close to Sherman even wonder whether he really committed suicide. They pointed out that he did not leave a will. Sherman's identity card was also found near his home, not at the scene of the suicide. But the coroner has repeatedly confirmed that Sherman did commit suicide.

So why did Sherman commit suicide?

As with most suicide cases, no one knows the exact cause. Sherman, who has suffered from depression, may be in a trance because he does not follow the doctor's orders to overdose marijuana. But what is clear is that he is really under a lot of pressure in finance and career.

When Sherman died, people focused on the latter.

In the age of social media, success or failure will soon spread through the streets. In such an environment, entrepreneurs are more difficult to manage than ever before-and more difficult than ever to withstand failure.

"The founders of the company may be in turmoil now. "says a tech entrepreneur. He says many partners who have had many years of friendship will go their separate ways in the process of financing, with people often in a state of nervousness and even frequent treatment.

"Nobody wants to talk about it unless you say it first." They would say, ' I have the same problem. ' I do think it's harder now, because the pace of media sharing and communication has accelerated dramatically. ”

"Before, losers can be very poised. "Another entrepreneur said," When you've failed, it's frustrating to be with your family and investors, but it's not public. In the social media age, failure has become a very public thing. Jody was stuck in it this time, and his success brought him respect. But there was no possibility of public humiliation before. ”

The tech circle has thousands of people who treat founders like Sherman as friends, advisers, and role models, so his public failure will disappoint those who have always respected him. When your best friend is in contact with your business as a partner or as an investor, there is no place to be safe once you get into trouble.

Dave Mcclure (Dave McClure) is sympathetic to the pressures of entrepreneurship. He is an investor in Ecomom and has founded 500Startups, an investment firm.

"God, entrepreneurship is killing me." He recalls the hardships of his start-up. He has experienced layoffs, entrepreneurial partners, family feuds, but not much.

"It's a lot of work, but it's not very rewarding," he said. He said, "Sometimes you will be alone in the corner crying." You really can't do anything. You don't have a social life and you don't want to communicate with friends and family because they don't understand your situation. Your world revolves around your business, all in order to survive, in order not to look like a fool in front of the staff. ”

Mcclure realised that many of the pressures of entrepreneurs were actually caused by themselves. They can live a nine-to-five life like most friends, and they should remain optimistic no matter how big the challenge is.

"There is a perception that this is a problem in the first world, and it has not reached the level of war, starvation or similar problems." But when your whole world is trying to show you how successful you are, and to stick to it, it's hard to be stressed when you're in a terrible mess but you have to pretend everything is normal. ”

People who know Sherman say their lives must never be like him again. Some of his close friends say Sherman's suicide has allowed them to rethink their careers and what they really value.

"Is it worthwhile to start a business?" One man asked, "Is it worth living for?"

The Last Supper

January 26, the day before Sherman suicide, he is still with friends to make plans. One of them was a trip to Guatemala in early February, and a meeting with a good friend.

But none of these plans can be planned. The friend who was supposed to attend the meeting with Sherman is now completely immersed in the memory of their last meeting. One months before Sherman suicide, they dined together. The friend said that Sherman's face still haunted him that night.

His expression was difficult that night. "I don't think it's sad, but it's like saying good-bye to me," the friend recalls. He said, ' I've never seen you so relaxed. I respect you very much. ' I can't believe how bad you are at financing, but it's actually good for you, ' he said. ’”

One months later, Jodi Schollman died.

This article compiles from BusinessInsider

(Xuan Chen Ding Hong Wei Jin)