life style businesses
Everyone has an idea but executing on an idea is a completely different thing. I have met with a variety of people over the past six months. Some have killer ideas that could possibly scale while others have solid ideas that have the potential to be great life style businesses.
What do I mean by life style businesses? A life style business is a business that generates enough money to sustain a life style for yourself and perhaps your partners, that's it. Many of these businesses start with seed money from family and friends that over time are paid back. There is something to be said for these type of businesses. You run them and nobody else has a say in the decisions that you make. Being your own boss is a beautiful thing. Once you begin taking angel or VC money, your business needs to grow to a completely different level. Perhaps it will, perhaps it won't. All new businesses are risky no matter what they are. The question is always scalability. VC's like to see businesses that have potential to be worth millions of dollars and hopefully at least many times their original investment.
There are always problems that can arise with life style businesses particularly when you have a partnership. Sometimes the partnership doesn't work out. When you have a board, they not only give advice but are responsible for the governance of the organization. They can make decisions about partnerships that aren't working like getting rid of both of you, bringing someone else in to run the business or choosing one to stay and another to go. Sometimes it is a wonderful thing to have a board because they generally provide a support system based on their experience. They are in essence mentors. When you have a life style business there isn't anybody to come to for advice and help dissolving a messy partnership.
There are certainly pros and cons to both but as more and more people jump into the game of new businesses, there should be some thoughts about life style businesses. There are many businesses in the tech world through blogging or apps that provide enough income for one person or maybe two. Sometimes taking money on a business that might not have the potential to truly scale is best making it your own and enjoying the fruits of your labor.