"Never give up. Normally it is the last key on the ring which opens the door".

-Paulo Coelho

When the rope snaps

GERRIT BROUWER

THE CIRCUS TENT PUBLISHERS BV 2022

Author: Gerrit Brouwer
Contact: Gerrit@thecircustent.com
Illustrator: Hasker
Print: Pumbo (www.pumbo.nl)

ISBN 978-94-6443-640-2

Use this book to learn. What would you have done? This publication contains the personal story, the opinions, the ideas of the author. The author and publisher expressly disclaim any responsibility for any liability, loss, or risk, personal or otherwise, which is incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this book.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the publishers.

Table of Contents

A personal message

Act 1. The Dependency Trap

Act 2. A Devilish Dilemma

Act 3. The Ugly Leaver

Act 4. Vodka OJ

Act 5. October Fest

Act 6. Freddies on Friday

Act 7. The Price is way too high

Act 8. No Stylist

Act 9. The Canary

Act 10. The Pitchman

Act 11. The Trapeze

Act 12. Love Anchor

Act 13. Wrong Turns

Act 14. Big

Act 15. Two lives

Act 16. The Kirchberg Condo

Act 17. Redwood Room

Act 18. House Lannister

Act 19. Las Dalias

Act 20. William Vale

Act 21. Bacchanal

Act 22. Checkmate

Act 23. Disco Dolly

Act 24. -Banyan Tree

Act 25. The Puzzle of Laparade

Epilogue

Appendix I Music of the Journey

Appendix II Books to read

About the author

A personal message

Thank you for joining me on this journey. I felt the need to share my story already in July 2018, during a walk with my youngest son. He was a one-and-a-half-year-old toddler then, and we walked across the beach on a pristine tropical island. He was enjoying himself innocently, watching the waves, the palm trees and the white sandy beach. His magnificent blue eyes shattered when I cuddled him.

A few weeks earlier, my life started to fall apart. First, slowly, beginning with a provisional board meeting where I stepped aside in my role as CEO. Soon after I left, the intensity ramped up as allegations of mismanagement, drug abuse, and fraud came on my radar. Accusations you could not wish for, and certainly not as a loving father of a beautiful family and a successful company. When a journalist picked up these developments, I saw the gallows hanging in the distance.

The weeks that followed were extreme. I felt alone and shocked and stuck to my lifestyle and bad habits to suppress my emotions. I was caught in my world and did not dare to speak openly, and I could only react passively. Still with hope and positivity, but in all honesty, I was dead tired and burnt out—ready for the butcher. I was fighting the battle of my life, and the bitter consequences would become apparent in the weeks and months after the holiday.

I remember sitting down with my son at a pizza place opposite the beach whilst I was making sketches on my notepad. I could organise my thoughts quickly before the pizzas were ready to take to my family in the villa. After the holiday, I lost everything because of my mistakes, a wrong purpose and unfortunate life events. "Shit always travels together".

My positive energy, self-confidence, and ability to fix everything made way for shame and despair. My independent life became dependent, and there were days that I considered ending my life. It was checkmate mentally. Especially feeling lonely was hard; it was much more challenging than my financial struggles.

When I surrendered, my life changed more positively slowly. It was healing and purifying. I felt I was finding myself again; my anger was disappearing; I did not see myself as a victim and did not feel the need to blame others anymore. I was starting to forgive myself by reflecting on all the events, moving on, looking at things more objectively, and feeling more comfortable living a life from a daily perspective instead of living with high ambitions and pursuing wealth.

It lasted nearly three years after I picked up my notes and drawings again to start writing this book. I felt I was ready for it but was still uncertain about the format and approach. My story to share is my journey as co-founder and CEO of Appical.

Why was this book written? I felt I had to share the other side of my entrepreneurial rollercoaster. Online media is all about celebrating success and not about the vulnerability of an entrepreneur. Almost every entrepreneur deals with permanent stress, and one of the three founders faces depression. It can be lonely at the top, and limited mental health support is available when things go wrong. You have to figure it all out by yourself.

This book is not a self-help or a how-to guide to building a successful company. The story tells you my story from 2016 to 2019. In twenty-five chapters, I will guide you through the various phases of building Appical and focus on the critical entrepreneurial and personal vulnerabilities of building and growing a business. I hope this book will help you make decisions that foster your resilience in your entrepreneurial and personal career.

Finally, there are several people I want to thank explicitly. Especially my family has given me the space and support to be part of an adventure of a lifetime. My ex-wife for a beautiful relationship and four exceptional children. I want to thank my parents, who have always been there for me during the darkest days. My friends carried me with love and humour when things went south. My girlfriend and our daughter offered me stability when I had nothing left. My assistant and my buddies for having such a blast. Lastly, my former colleagues, co-founders, investors and business partners who made Appical such a success and so much fun.

Friesland, August 2022

Act 1. The Dependency Trap

Building and growing a technology company can be energising and rewarding. But, it's not a walk in the park, and it may feel like pushing a giant rock up the hill from time to time. The moment I was preparing the legal documentation for setting up Appical, I could not foresee the personal impact of the adventure. In December 2011, I approached the start of our new company as a project. I had been conditioned by the various consulting and interim management roles in the years before.

Before my 33-year birthday, I just kept on going and could live an independent life: have a fantastic family, have a great place to live, have enjoyable holidays, and set my own pace.

Fast forward 7-years later, the thriving buzz of our company changed into complete darkness. Appical made me and tore me down. The first year of our company resonates with my last year's experiences. The significant difference is that I was building the company from the ground up with minimal stress levels versus growing an existing company with many politics and high stress.

After founding the company together with two other co-founders, I grew into my role as CEO and co-founder. First, by taking care of our business planning and financial operations and months later also in sales & strategy, the part I would have the most significant impact. We founded the company with three co-founders, initially financed by a seed investment by two investment companies. One of the investors I already had been working with for a few years asked me to become the point man for a digital learning start-up born from a Dutch training company Boertiengroep, later named Appical.

The two co-founders worked there and were already experimenting with bespoke innovative learning products. I made my investment through one of the two investment companies for an indirect interest of 10%, and the other two co-founders owned a direct stake of 1.5%. In hindsight, we all agreed on a founder's unfriendly shareholder structure. The two investment companies could make all the material decisions.

As the start-up managers, we had limited room to move, but we found a way. My role was to manage the financial and operational delivery of Appical, meaning to secure enough cash flow to grow the company to the next level and preferably prepare for an exit a few years later.

Signing the investment documentation already set the dependency trap. We fell into it for the first time when my co-founder and I flew back for the first time from San Francisco in May 2012. While drinking a Heineken beer on a 12-hour flight, we concluded that our third co-founder was not contributing anymore and became a liability to the company.

After a few months in business, it became clear that our business model could not monetise enough. Until then, we had been developing apps for enterprise companies for a fee.

We needed to nail a niche and bring our existing expertise to a new market. Companies cautiously realised the importance of offering their new hires a warm welcome. Our renewed focus brought energy and new customer cases, but it would take another 2-3 years until 2015, including some challenging financial times, before we could accelerate.

The team consisted of a CTO, a business development intern and three co-founders. Before landing in Amsterdam, we agreed to call our investor right after the flight to discuss our decision to let go of our third co-founder.

Whilst driving on the 30-km long Afsluitdijk back home to my family, I had a call with the investment partner to talk about our motivation to start the exit process of our co-founder. We made the right call on time, and it is better to end a collaboration sooner than later. I felt supported by our investors, and in the following weeks, we finalised the exit process, fortunately outside court. Our third co-founder closed the door without drama.

Our financial situation was still tight, but we felt more confident. Our focus started to pay off: We closed our biggest customer in the USA in the summer, and we were able to arrange a new banking facility on top of the hundred and fifty thousand euros initial start-up financing. My co-founder and I had a great connection and working relationship that lasted until the end of 2016. He had been a creative genius and an expert in learning, allowing Appical to win customers as a team. We could get along well and were complementary; we could talk and had each other's back in overcoming crises. We had much fun whilst travelling and working nonstop to build our company.

What about the dependency trap?

On Christmas evening, at the end of our first year in business, I was sent an invitation to a shareholder meeting later in January 2013. The relationship with our two investors was deteriorating in just a few months.

Building our platform, servicing our customers, and financing our monthly expenses became more challenging by the week. The conversations in the fall of 2012 became grim as we did not feel supported anymore in our mission. Their perspective was generating short-term cash flow by doing projects, whereas growing a subscription-based platform is a more long-term game. But we did not have any control over the company.

With the investors owning 97% of our business, we had a hard nut to crack. You can't move on or achieve anything. We felt the investor did not appreciate our hard work, and it seemed to be just a money play for them. After the conversations went nowhere, the powerplay forced us into an uncomfortable position.

And since I worked with them before Appical, there was much anger with them because they felt I betrayed them, one of the partners told me later in 2013. My take on this is that we felt threatened. And when you feel threatened, you are entering a new dimension in the world of start-ups. You are trying to protect your baby and move on at all costs.

Finding new investors and increasing our company ownership were our number one objectives. Our attention shifted and impacted the business, but I never doubted the outcome. It lasted until deep in January 2013.

Fortunately, there had never been a shareholder meeting to approve my resignation. We secured a convertible loan from two informal investors in February 2013 and could finally own the company and get back to work to grow Appical. We could be proud of our hard work and impressive customer base already, and we were starting to become a technology company.

Why am I sharing this journey of the very first year? Our agreement in January 2012 forced us to carry the consequences. Having had so little ownership initially has made us dependent for years. New investors don't like to finance an exit of an investor leaving the company. There is little money on the table for your company valuation. And if you do fund a withdrawal, it goes at the expense of your growth capital.

The decisions you make at the start set the scene for the years to come. At least if you are lucky enough to be given your time.

Vulnerability in business has many faces. The dependency trap of our first year is just one example to share with you. Every phase you go through as a founder entrepreneur is different, and challenges might appear along the way. You will get challenged. For me, my journey would end the same way it started. Don't fall into the dependency trap: if you become an entrepreneur, do it on your terms.

Act 2. A Devilish Dilemma

The incoming shelling started in the months before that day, at the end of June 2018. To be precise, June 26th. The day of days.

It was a cloudy but mild day in June. I woke up feeling nauseous and sleepy, not really awake. After bringing my children to school, I headed to the office near the IJ-river in the Northern part of Amsterdam. An entrepreneurial environment that had been attracting me for years, working there even before Appical. The office looked like a spaceship with the best views and energy I had ever experienced.

The months before were draining, and I already saw the big clouds coming when I looked outside the windows of our beautiful office. The relationship had gone south the year before, and my wrong turns had their impact. Meanwhile, the investment company, which owned nearly 80% of the equity in our company, made several attempts to join our supervisory board.

On multiple occasions, I met the founder and chairman of the fund (let's call him the end boss after this). I heard the promise that he needed me to stay on board and that our financing package would be released, including the share redistribution to our management team. His wingman was responsible for the relationship with Appical (let's call him the investor after this). He looked like a silver fox with multiple personalities, and his unexpected behaviour made him hard to read. It was time to meet with him in early June, the week after my tenth wedding anniversary.

The investor had brought a lawyer who attended the meeting but said nothing. He did not announce his presence, which I thought was a warning sign. The document lay on the table, and the conversation that followed was a cannonade of words back and forth.

The investor told us that we were going to do it together. And from now on, the investor would provide all the resources, and we could continue our growth. The company had been in survival mode for over six months following an impressive period of growth the year before. But the stalled conversations had turned our focus inward instead of outward.

I asked several times during the conversation if they would kick me out. Each time I got the reassuring answer that that wouldn't be the case and that I was essential to the company. "We are going to do it together", the investor said. My two colleagues were silent and couldn't bring in anything.

After calling for a time-out, I walked out of the meeting room. It was drizzling on the patio when I got hold of our lawyer. The once pugnacious voice told me it was best to cooperate. "There are still other possibilities", he said. Then I spoke with my two colleagues, and shortly after, I decided to sign the document.

However, it had been chaos in my head: dreams about the future, doubts about my health, longing for peace and a new life with my family. My head was the worst counsellor at that time. My gut feeling pointed the other way, feeling resistance.

I believe not signing the document was my final 'trump card'. To remain in control for the moment and try to figure out an escape simultaneously. But with the threats of not continuing the financing relationship, the company's continuity was also at stake as we ran out of money. The communication had become very hostile, and I was dead tired and sick of the politics and stress.

The growth and the many transitions of the year before had been taking their toll. I was using cocaine regularly to keep functioning and suppress my emotions. Moving on like this would cost me my life but signing the document would also cost me my life.

I felt something needed to happen as I was in terrible shape mentally. I finally gave in to the pressure and signed the document. Continuity for the company is crucial, and I always have a plan, I told myself when I signed the document, ignoring my gut feeling completely.

The following weeks felt offensive despite the investor's multiple attempts to reassure me we would be in this together. Several employees were invited to the office of the investor to have a conversation. One of our team leaders told me that I had to be very careful and that I had to prepare for the worst. He would leave the company just a few weeks later.

My daily drive to our office took ages, and I felt like a living dead, even after a solid night of sleep back home. I picked up my work and sat next to my assistant the moment that our investor entered the office together with a rather bleak person. He looked like Mike Ehrmantraut from the Breaking Bad tv-series, and I guess he was just there to take care of things when I would start a fight.

When I heard the statement of the investor in the meeting room, I responded calmly and let it go passed me. The investor talked like a judge in court. There was no need to argue on my side, and I think it surprised the investor how easy I took it. As a result, the investor put me on non-active with my consent. Later that day, they would install an interim CEO to take over my duties temporarily. Following standard protocol, they asked me not to mess with the company bank account or to access the office and speak with any employees. The last one was impossible as we had become close friends.

After personally addressing our team to explain the decision, I closed the doors of the company I loved so much. But the love was not mutual anymore. The only thing that was left to do was to move on. The pressure I had been struggling with for too long was finally gone. It felt like a new beginning to me, and I was grateful to be able to spend more time with my family and get rid of my bad habits. At the end of that day, I signed a quote from our bank and my wife to buy our new home—a beautiful estate in the Southwest part of Friesland.

Before going on a holiday to Bali & Lombok with my family in mid-July, I came to Amsterdam to work on new plans and meet with my colleagues. Have dinner at the delicious restaurant of Sushi Samba and go out for drinks at the Leidseplein. Some colleagues were very emotional, and others just moved on as if nothing had happened. The communication with the investor and the interim CEO seemed constructive, and I helped them out with questions, and there were even talks to re-join the company in a different role.

The first phone call with our investor days after being placed on non-active was constructive and respectful. He thanked me for contributing to the company's growth and even exchanged ideas for my return. The most mutually beneficial move would be for me to take a few months off to recharge and then return in a commercial leadership role. I did not have the ambition to return as a CEO and did not want to experience the stress anymore; I just wanted to inspire people and strategically impact the company. "It is lonely at the top", he once told me. We agreed to meet in the office next week to continue our talks. That phone call felt promising.

A week later, on a sunny afternoon, I parked my car close to the apartment in the Jordaan. I decided to walk across the Vondelpark. The office of the investor resided close to the park—a charismatic and impressive nineteen-century building with multiple floors. After greeting the assistant, I entered his office on the ground floor. The air-conditioning was roaring, and the ice-cold temperature set the scene for what would happen.

After some small talk, he told me that he appreciated that I kept my distance from the company. Then suddenly and by surprise, the atmosphere changed completely. He told me he had heard many bad things about me through our employees and that I was under the influence of drugs. Their accountant, EY, supposedly discovered that my credit card expenses were out of line. On top of that, I had aggressively offended people, and the management agreement was not legally valid. It was a long list, and I probably have forgotten something.

He finished his verdict with a smile on his face. He told me I could walk away from it all or be in a horrible place: behind bars or worse. He offered me 0 euros for my shares and all the loans I had provided to the company in the years before to keep the company afloat.

I listened to him quietly and responded that I could never make a deal like that, as the shares in the company were worth millions of euros. I left his office silently without shaking hands and said goodbye to his assistant, and I never saw him again.

I walked back through the Vondelpark, having a dry mouth and sweating as the sun was burning on my head. I bought a beer on my way back and drank it on a wooden bench in the middle of the park. Feeling desperate and shocked, I stepped into my car. A line of cocaine made me feel much more in control of my emotions, and I could think more clearly and look at this powerplay more objectively. I felt ashamed, but the holiday was approaching soon, feeling like my salvation. And in Indonesia, drugs are forbidden; you risk the death penalty or a lengthy stay in Hotel K.

The investor called me several times in the following days to check if I was in for making a deal. From now on, things started to get ugly, and I needed a lawyer.

Act 3. The Ugly Leaver

Arriving with the speedboat on a tropical island is a magical experience. The palm trees, the pristine blue waters and the white beaches give you an exclusive feeling of freedom. THE environment that I needed to be in after some very stressful weeks. I had previously been to Gili Meno several times with my wife, an island with special memories.

After it became clear to the investor that I would not accept the deal, their lawyers took care of it. The shelling continued, and deadlines were tight, causing a balancing act between anxiety and hope.

The night before we flew to Bali, the lawyer was drafting a letter to the investor. After reading the letter and discussing it in detail over the phone, I provided my final feedback. The letter tackled most of the allegations and created a level playing field. My objective was to get a fair deal on the table that allowed me and my family to move on. A few minutes before midnight, the lawyer emailed the letter to the investor. I felt more comfortable with the lawyer as a gatekeeper and being at a distance with six hours time difference in Bali allowed me to rest and enjoy family time.

It lasted nearly a week before the first reaction came, right on that beach.

My wife and my kids were on their way to the beautiful resort on the island's east side. We would spend the week there. The mules would pick up our luggage, and I waited for them to arrive. On these remote islands, mules are the only way of transportation. I decided to use the time to reply directly to the lawyer.

I typed an email to my lawyer to provide my response at a plastic dining table close to the ferry. The investor's reaction to our first letter offered perspective and a possibility to start negotiating a deal. Meanwhile, the luggage could be loaded and delivered to the resort. In just a few minutes, I fired away my reaction. I felt more comfortable and in control when I walked away from the restaurant. The ball was now in their park.

I walked to the most beautiful resort on the east coast and enjoyed walking past a typical island village. Chickens ran over the concrete pathway, and palm trees caught a slight windy breeze.

The kids sat on the soft sofas and ran toward me to say hi. The place was magnificent and perfect for dreaming about a new future and making plans. Without the many sacrifices I had to make whilst building and growing Appical. The negotiations were in the lawyer's hands, and we had a few phenomenal days in paradise. It was terrific; I could switch off and enjoy the kids and the walks across the island. Remember that feeling when you sit in the sun at the end of the day? It makes you feel sleepy and relaxed. I hoped this feeling could have lasted forever.

Until that moment on a Friday night. During the day, we rode a bike around the island and enjoyed a seafood dinner at the beach. We all felt tired and sleepy, and I was about to switch off my phone.

And then it rang.