Greg Isenberg is a multi-exit Silicon Valley entrepreneur and owner of Late Checkout product studio. He has:
- Headed Product Strategy at WeWork
- Been an advisor to Reddit
- Founded a startup, Islands, which was sold to WeWork
- Founded 5by, which was sold to StumbleUpon
Guest Author: Greg Isenberg
Today, I met an entrepreneur who shared a simple clear framework for founders about “startup exits”.
There are 3 types of exits:
1) Car Changing Money – Enough to upgrade your ride.
2) House Changing Money – Enough to change your address.
3) Life Changing Money – Enough to redefine your trajectory.
It’s a clever distinction that got me thinking deeper about the paths laid before us as entrepreneurs.
– Venture-backed startups—the ones that headline news stories—offer a roughly 20% shot at life-changing money, the kind that alters everything.
But what’s often glossed over is the silent majority, 80% by count, who after perhaps 7 years, have little to show but modest pay and burgeoning grey hairs.
It’s a high-stakes game where the house often wins.
– Cash-flowing startups — Initially, your indie cash-flowing products won’t turn heads.
A product doing $1k a month in MRR might elicit a patronizing “that’s cute” from the venture crowd.
But this just the seedling from which greater growth can sprout. As you add products, expand from a solopreneur to a multipreneur, these numbers can balloon—$10k, $100k, $1M monthly.
With no venture capitalist, you’re forced to build a fundamentally profitable business. This not only fuels growth but also sweetens the pot at exit.
Cash-flowing assets become coveted treasures, especially in bear markets where they’re as rare as water in a desert. And with a cleaner cap table, getting these deals done are way more easy.
Contrast this with venture-backed ventures during bear markets, mergers and acquisitions dry up, and without perfect timing, many are left stranded without an exit, just out of reach of the runway.
So, as you plot your course, ask yourself what you’re optimizing for: Is it the car, the house, or life itself?
Each choice carries its own set of risks and rewards, each path a different reflection of what success looks like to you.
I’ve come to realize, the less obvious paths often lead to the most interesting destinations.
So, all that to say… Decide what you’re trying to optimize for. Car, house, or life-changing money.
Check out the original tweet here.
