Venture Capital vs Lifestyle Business - Craftsman Founder

Venture Capital vs Lifestyle Business

Dear Lucas…

I have heard that if you plan on raising money from VCs, you also need to believe you could become a $1B company or $100M in revenue within 10 years, but I have been thinking lately that we don’t need to be a $1B company to be successful.

We could certainly get there, but I don’t think we would ever grow fast enough to please any VC. A single developer lifestyle business sounds pretty good right now, what do you think?

—Questioning Motivations

Hi Questioning Motivations,

I often find myself thinking about what is the difference between small business owners and startup founders. It is really interesting because many times they start out the exact same life situation doing the exact same thing. For example, there were thousands of record shop owners in 1971, but only one turned out to be Richard Branson and Virgin Records.

“There is no point in starting your own business unless you do it out of a sense of frustration.” —Richard Branson

What frustration are you trying to solve? The frustration of putting food on your family’s plate without having a boss? Or the frustrations of changing the world for the better? Both are worthy goals, worthy to be pursued. Both can be struggles of a lifetime. Both are difficult to achieve. Both are fraught with peril. Neither guarantee success. One is not intrisically better than the other, just different.

If you want to enjoy a nice lifestyle, if you want to provide well for your family and don’t really care much beyond that, venture capital is not for you. It is not intended to be used for that purpose, so please don’t even try. Bootstrapping and bank debt are fine tools for lifestyle businesses.

Venture capital is a tool for people who are hellbent on changing the world for the better and won’t take no for an answer. It is not the only tool you will need or use to accomplish this task. You may also need bank financing, IPO, debt, and even bootstrapping. Great entrepreneurs have used them all successfully.

Learn what drives you, what motivates you, and act accordingly.



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Lucas Carlson

About the Author

Lucas Carlson

Lucas Carlson is a hands-on consultant, author and entrepreneur. He helps founders discover opportunities for growth, both for their companies and for themselves. He was the CEO and founder of AppFog, a popular startup acquired in 2013 after signing up over 100,000 developers and raising nearly $10M in venture funding from top angels and VCs.

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