Second Chances in Business: How Overcoming Setbacks Builds Stronger Entrepreneurs

Why your biggest failure might be your greatest competitive advantage.

Everyone loves a comeback story. But we tend to miss the fact that the setback itself isn’t what makes you stronger. It’s what you choose to do with it. After nearly three decades in financial markets, I’ve learned that the entrepreneurs who bounce back don’t just become resilient, come back fundamentally different people than they were before things fell apart.

Setbacks Force You to Rebuild Your Foundation

When everything’s going well, you can get by on momentum. You might be cutting corners, ignoring red flags, or making decisions that work in the short term but crack your foundation over time. A major setback doesn’t let you do that anymore.

I spent 21 years on Wall Street before my world came crashing down. Addiction, legal troubles, a FINRA bar that followed me around—at the time, it felt like the end. Looking back, it was actually the beginning of building something real. When you’re forced to start over, you can’t afford to make the same mistakes. You rebuild with better materials.

The rebuild teaches you:

• Honesty becomes non-negotiable: You stop hiding from problems because you’ve seen where that leads.
• Sustainability matters more than speed: Fast growth means nothing if you can’t maintain it.
• Your reputation is earned daily: One good year doesn’t erase past mistakes. Consistent action does.

You Learn Who You Really Are Under Pressure

Success can hide a lot of weaknesses. Failure exposes all of them. When I was at my lowest point, being separated from my family, in and out of jail, dealing with the consequences of choices I’d made, I had to face the truth about who I’d become. That kind of clarity is brutal, but it’s also a gift.

My brother asked me a simple question that changed everything: “Don’t you want your kids to have good memories of their childhood like we did?” That moment of clarity came because I’d run out of excuses and distractions. I had to decide if I was going to keep lying to myself or do the hard work of changing.

Eight years sober later, that foundation of self-awareness shapes how I run Avanza Capital Holdings. We’ve funded over $250 million in merchant cash advances across 48 states, and every decision gets filtered through lessons I learned the hard way. When you’ve been through real adversity, you develop an internal compass that keeps you honest.

Setbacks Create Empathy That Becomes Your Edge

Traditional banks reject 86.5% of small business loan applications. Most of those business owners are good operators who just don’t fit the standard lending box. I understand them because I’ve been there, trying to rebuild, looking for someone who sees your potential instead of just your past.

When you’ve overcome your own setbacks, you spot resilience in other people. You recognize the difference between someone who’s reckless and someone who made a mistake and learned from it. That perspective shapes everything at Avanza. We work with businesses generating $50,000 or more monthly that traditional banks overlook. We can approve and fund them in hours, not weeks, because we understand what it’s like to need a second chance.

This empathy translates to business advantage: 

• You build deeper relationships with clients who feel understood
• You make better judgment calls about who deserves support
• You attract customers and partners who value authenticity over polish

The Path Forward Matters More Than the Past

Here’s what I tell every entrepreneur dealing with a setback: your past doesn’t define your future unless you let it. I’m not going to pretend the FINRA bar doesn’t exist or that my struggles with addiction never happened. But I’m also not going to let those things be the final word on who I am or what Avanza represents.

The alternative lending market is growing at over 15% annually because small businesses need access to capital that traditional banking can’t provide. We’re positioned to serve that need because we understand both sides, be it the financial markets expertise I gained over three decades or the Main Street reality of business owners who need someone to believe in them.

Your setback already happened. The only question now is what you’re going to build with the lessons you learned from it. If you’re ready to turn your experience into your edge, that’s where real success begins.

Written by Frank Scarso. Have you read?
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