Comment by anovikov
1 year ago
Equity business is thoroughly inaccessible to the vast majority of people, especially the IT people. It requires being an insider at least to a degree, and it requires apart from knowledge and skills, at least some luck.
I've seen a lot of extremely bright, talented and hardworking people trying to play that game - all failed, some ruined their entire lives simply for refusing to give up for too long. While those who went into cash business - as simple as an outsourcing shop - are almost all doing fine.
Nudging people to try for "equity business" is a dangerous advice to give.
I don't understand why people are so opposed to starting a bootstrapped consulting company. You can start as a single man shop and then hire people and expand.
I'm running a consultancy in a LCOL area. Last year we made 400k revenue, 150k profit and 40% growth. We already have verbal agreements for around 400k worth of sales for this year. We have the employees for 600k revenue and if we manage to bring in more sales we can grow the team to meet demand. 600k revenue would mean 250k profit for us.
I can easily see us growing the company to a few million revenue in the coming years. Making lots of profit while having the option of selling the company for a lot of money if a nice offer comes along. Sure it won't be making me a billionaire, but I can easily see myself building generational wealth here.
My country has public tax records for all companies over 250k revenue. The story is very often with product companies that they have burnt 2, 5, 10 million to achieve 2-3m ARR while still making a loss.
This works in your situation. It does not for most Americans. Your current total profit would barely support a small family.
which country is this btw ? I'm assumming UK ?
It also requires you already have enough money to not need any returns for a few years.
That is a much smaller problem, most people in IT have it.
Citation needed. From my experience, being able to go two years without income is an extreme edge case.
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Could you elaborate on that? How come it requires being an insider? What constitutes an insider?
Someone who does things not because he read about them on the Internet, but because they were invented or co-invented, or owned by people he went to school with, or family connections. When "system" is not something you fight with, but it's YOU and people who are your family or treat you as a family. Elizabeth Holmes is a prime example but only because she was caught.