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
In 2013, at 23, I felt on top of the world. I’d just sold my company for $5M. Well, kinda. I’ll tell you the story of how I lost it all.
The $5M was in stock in a VC-backed company. But not just any stock.
This company wasn’t just any company.
The company was doing $35M in revenue, with 70% gross margins.
It was backed by Silicon Valley’s who’s who. I was living the dream. Or so I thought.
My thinking was simple: Worst case? We’d cut staff, print $20M/year.
And that rate, I’d easy be able to get my $5M of stock out, maybe even more.
How could it go wrong?
Spoiler alert: It did. Lol.
Slowly, then all at once, we became a zombie company.
Revenue started declining. Growth stalled. VCs lost interest.
Here’s the thing about the VC model. They care about growth and the next big unicorn.
We looked like a donkey with a party hat.
Suddenly, no one wanted to fund us. We had to sell. Fast.
We found a buyer. People congratulated us. But I knew the truth: This wasn’t a success.
The outcome? We got nothing. Zip. Nada. My $5M paper fortune? Gone with the wind.
But here’s the silver lining: I learned this lesson at 23, not 43.
Fast forward to today:
I run a different kind of company. We’re profitable. We grow steadily. No VC money. No paper valuations.
The best part of my job now is sending out profit shares. 2x a year.
Our team’s reaction is priceless: “Wow, thank you! This is real?”
They’re used to VC-backed startups:
1. Equity worth millions (on paper)
2. Promises of future riches
3. Reality – 90%+ of the time worth nothing
I’ve been there, worn the t-shirt. VC equity is just gravy. Maybe it pays off, probably not.
But profit shares? That’s real money.
In your bank account. Buy a car. Put a down payment on a house. Live your life now, not in some hypothetical future.
This is why we’re seeing the rise of the dividend startup.
More and more people are choosing real money over paper unicorns.
Here’s my lesson learned:
Build a business that prints cash, not promises.
Focus on profitability, not vanity metrics.
Grow steadily, not at all costs.
Your team will thank you.
Your stress levels will thank you.
Your bank account will definitely thank you.
Am I grateful for my $5M lesson? Absolutely. It shaped who I am today.
So here’s to failing young, learning fast, and building businesses that matter.
Real value. Real profits. Real impact.
I’m not saying you can’t build a VC-backed business and build wealth. You totally can.
But the odds are stacked against you.
And most employees think when they join a VC-backed rocketship, that their stock is as good as gold.
It usually isn’t. Sharing this story in case it’s useful to someone.
The rise of the dividend startup isn’t just coming.
It’s here.
—
Woah, thank you! Ways to work with me below:
Frameworks/guides/free startup ideas: gregisenberg.com
Design/copy agency: DesignScientist.com
AI-assisted SEO: BoringMarketing.com
AI-assisted ads agency: BoringAds.com
