daily articles for founders

Paths to $5m  

Here's an article from 2010, by Gabriel Weinberg, doing some maths to calculate how to achieve a $5m exit depending on what sort of funding and cofounders you take. The conclusion:

At no investment and two co-founders, you'd need a $10M sale to get your $5M. At 80/20 that becomes $6.25M. And of course as a sole founder it's just $5M.

Those differences are pretty vast. $5M exit as a sole founder with no investment to $100M exit with several rounds of financing and two co-founders.

And yet the financial outcome is the same. But the probabilities are not. It's much easier to sell a small company for $15M than it is to IPO.

Of course, as Tim Ferriss puts it, why do you want $5m? If it's in order to sustain a certain lifestyle, then perhaps a muse or other lifestyle business may be even easier to achieve.

A good friend of mine has a talent for building these businesses - he can fairly reliably build a business that will make between £5k and £20k a month for a few hours a week of required effort. These are not always inspiring businesses, but in terms of allowing him to have the lifestyle he wants, and enabling him to do what he wants with his time, they are clearly successes.

If you just want a free lifestyle that enables you to spend your time on what you want, and if "what you want" isn't startups, you don't even need to build an exit-worthy startup to get your desired lifestyle.

More from the library:
How to evaluate a non-technical cofounder
Create an illusion of space in checkout processes
Habits of effective startup mentors
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