I gave up rock climbing so that Distil could close it’s Series A round. Not in the sense of “I don’t have time to do this anymore”. Full blown, cold turkey, hang up my rock shoes and never climb again if I wanted Distil to succeed.
I started rock climbing in university (see Rock Climbing for Introverts). It was a pretty big part of my life through my first job at Nortel and into the founding of Distil. I would go out every weekend when the weather was nice to the local crags. I would visit the climbing gym 2-3 times per week. Compete in local competitions. Plan vacations around climbing destinations. Being a rock climber was one of the axes I defined myself on.
So now we are closing our Series A round at Distil. We are past the negotiations, the valuation, the terms and conditions. Everything is signed and we are working through the post close conditions. These are the items that were asked for as part of close but require a reasonable amount of time to satisfy. All are routine.
One of these items is that we get key man insurance for myself, our CEO Jonathan, and my co-founder Steve. For those unfamiliar with the term, key man insurance is life insurance that is payable to the company. If I get hit by a bus the company will need to find a new technical leader. This will take time and money. To mitigate that risk, the company takes out a life insurance policy on me.
Now I’m not an insurance expert. This was explained to me as being standard and straightforward. But since the insurance will be paid to the company (instead of my family as is the case in personal insurance) the insurance carrier puts a bit more scrutiny on the application.
For one, the questionnaire was much longer and more detailed than any insurance questionnaire I’ve ever filled in before. And they want to know about my hobbies, specifically things like Sky Diving, Scuba Diving, Rock Climbing, etc…
I’m an honest guy. I’m not going to lie on an insurance application. If I fall to my death climbing El Capitan, I want my insurance policy to pay up. So I checked that I do rock climbing. More questions — how often, how high, do I use equipment? I dutifully provide the answers.
Then the insurance agent called. There were problems with my insurance application. Rock climbing was considered too dangerous for key man insurance. If I were to stop rock climbing, then maybe…. Discussions among management ensue. This was the last item to clear before the money was ours. The question was put to me — would I consider giving up rock climbing?
I was feeling hurt and confused. We had a team of 10. Without this investment round we would have to shut the doors. How could I tell our team who had worked hard for 2 years that the dream was over because I selfishly wanted to continue an outside passion? But why should I give up something I loved when no one else was being asked for a similar sacrifice? Steve wasn’t being asked to stop smoking because he might get lung cancer?
Were there other options? There were but all involved significantly higher premiums (and being a startup this would eat into our runway). Or they would involve shopping around for a carrier that would insure me, which would take more time. The clock was ticking. We were running out of time to complete the post close items.
So I caved. I took one for the team. I said I would give up rock climbing. I meant it. And I haven’t climbed since.