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That is exactly how I have approached this issue so far... I researched all the different things that rich people spend their money on (and most of them really

That is exactly how I have approached this issue so far... I researched all the different things that rich people spend their money on (and most of them really bore me). I'd like a nice house and a workshop, and some extra for non-extravagant travel. None of those cost too much money, but there is one other thing on the list: starting bigger ventures without requiring outside investors. The more money I have, the more ambitious my future endeavors can be.

sachinag 17y ago
Wait, why do bigger ventures without requiring outside investors? If you want to do bigger things, you'll have to put more in, and you're going to end up in a situation where the same percentage of your net worth is tied up. Instead, if you have a profitable exit, it will be much easier for you to raise more with giving up less from professional investors for your next, bigger project. Then you'll be able to do something big and awesome, maintain control, and still have more cash in the bank.
- elsewhen 17y ago
  I am not a big fan of taking outside investors. I have been a self-funded entrepreneur for my entire career and it has worked very well for me. The proceeds of a sale would allow me to have ample money in the bank and plenty left over for other endeavors. My issue is that the longer I wait (as long as everything continues apace), the more that "plenty" becomes.
sokoloff 17y ago
On your last point, I think you're perhaps being a little greedy (not in a terrible way). Let's say your firm is worth $2mm now and you forsee it doubling and maintaining 100% growth rate next year, so it will be worth roughly $4mm. Even if it doubles several more times, you still don't have enough to launch a very ambitious future endeavor but all along you're risking a random decline in a huge, valuable, and concentrated asset. Assuming your goals include having a family and secure financial life for yourself and them, I would be inclined to start taking money off the table as soon as I could be taking it off in $250m to $500m chunks. Not to say you need to sell it all, or even a controlling interest, but having had experiences of deep 6-figure losses in my trading account (which is extremely liquid 12 hours of every day with very low slippage), I know that I'd sleep a lot better with $300-500m off the table, and then get back to work growing the remaining 75% of the company into your multi-million. I would seriously consider though still taking on your second big endeavor with outside investors. They have a way of keeping you honest and realistic, and if you can't convince outside investors, I wonder if it's prudent to wager your whole nut anyway.

sachinag 17y ago

Wait, why do bigger ventures without requiring outside investors? If you want to do bigger things, you'll have to put more in, and you're going to end up in a situation where the same percentage of your net worth is tied up. Instead, if you have a profitable exit, it will be much easier for you to raise more with giving up less from professional investors for your next, bigger project. Then you'll be able to do something big and awesome, maintain control, and still have more cash in the bank.

elsewhen 17y ago
I am not a big fan of taking outside investors. I have been a self-funded entrepreneur for my entire career and it has worked very well for me. The proceeds of a sale would allow me to have ample money in the bank and plenty left over for other endeavors. My issue is that the longer I wait (as long as everything continues apace), the more that "plenty" becomes.

sokoloff 17y ago

On your last point, I think you're perhaps being a little greedy (not in a terrible way). Let's say your firm is worth $2mm now and you forsee it doubling and maintaining 100% growth rate next year, so it will be worth roughly $4mm. Even if it doubles several more times, you still don't have enough to launch a very ambitious future endeavor but all along you're risking a random decline in a huge, valuable, and concentrated asset. Assuming your goals include having a family and secure financial life for yourself and them, I would be inclined to start taking money off the table as soon as I could be taking it off in $250m to $500m chunks. Not to say you need to sell it all, or even a controlling interest, but having had experiences of deep 6-figure losses in my trading account (which is extremely liquid 12 hours of every day with very low slippage), I know that I'd sleep a lot better with $300-500m off the table, and then get back to work growing the remaining 75% of the company into your multi-million. I would seriously consider though still taking on your second big endeavor with outside investors. They have a way of keeping you honest and realistic, and if you can't convince outside investors, I wonder if it's prudent to wager your whole nut anyway.