The "connect with every investor in the company", which could even be enlarged to "connect with every constituent in the company", may be difficult, but it is important and helps bring closure. Too many don't have the courage, and instead choose to hide in shame, but by connecting, they will often find respect.

This post was mentioned on Twitter by chriskilmer: RT @hwy12: Smooth seas don’t make skillful sailors http://bit.ly/6tc6g9...

Seriously, this post articulates a lot of what I've learned from handling both disastrous and successful projects. You end up doing a lot more introspection and trying a lot more solutions when the world is collapsing around your ears, as well as seeing who's graceful under pressure.

My favorite interview question is "Tell me about your worst project". Bad candidates will reel off off complaints about how hard it was, but I know I've found a keeper when their eyes light up and they tell me about their epic struggles with a nightmare codebase, all the tricks they threw at it, and the little triumphs in the face of adversity.

I would also comment that the other side of the transaction is equally important. That is that the investors also be classy. A CEO who has to eat the crow that comes with a failed business needs support. There are those of course, who in hindsight shouldn't really be entrepreneurs. We need to let them know that. But many are excellent entrepreneurs who will rise again. Those CEO's needs to hear that business failure is a common element of entrepreneurship, but that business failure does not equate to personal failure.

Kevin

As with your conversation, it was a delightful catch-up chat and we too pondered how close we'd come to greatness the last time we'd worked together. I made it clear that anytime he was ready to jump, we were holding a big net!

The punch line? This CEO lost more money for our partnership than any I've ever backed.

Yet here we are ready to back him again if we find the right opportunity. Why? The reason is he was a great leader, and fully lived up to his commitment to us when we invested. The seas were just too rough at that point. Very few sailors survived.

And in another common comment, both then, and since, and again now he's always expressed his regret that he lost our money, and has always made it clear that it would make him feel much better about his career if he could make it up to us in another deal.

Great CEO's almost always get there having developed some scar tissue. As a wise man once said, "Good judgment comes from experience. And experience comes from bad judgment."