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That's a fair point. But I think if you look at most non-startup companies that stay around for 3-4 years they don't typically have the valuations that the star
by taylonr 14y ago
That's a fair point. But I think if you look at most non-startup companies that stay around for 3-4 years they don't typically have the valuations that the startups do in the same time.
For example, Joe's Plumbing shuts down after 2 years because Joe realizes he has to manage his books, do advertising, manage any junior plumbers etc. In the end he spends 50% of his time doing plumbing and 50% of his time doing "business." So he pays off his small business loan (maybe) of $100k and goes to work for Tom's Plumbing where at least he gets to do plumbing all the time.
He had a run of 2 years, but at no point was his company sitting on millions of dollars.
- wtvanhest 14y agoI wasn't referring to lifestyle businesses like you describe. I was referring to real companies with billion+ dollar valuations. Plenty of them fail (either reorg or liquidate), are bought and the products become useless etc. Here is a list of 2012's bankruptcies by assets: http://www.turnaroundletter.com/largest-bankruptcies-this-year http://www.turnaroundletter.com/largest-bankruptcies-this-ye... There isn't a single "software" company on the list. Now, I also understand that software companies are not as asset intensive, but it is hard to know what companies are "large" after a bankruptcy since their market caps approach zero. My point was specifically refering to real businesses, not lifestyle businesses.
- zacharycohn 14y agoI don't think Joe's Plumming counts as a lifestyle business. He probably put in equal hours to a startup entrepreneur. Startup != Small Business != lifestyle business.