Q: Serial entrepreneurs, how did already being rich and successful affect your second or third venture?

Having some money in the bank does change things.

But for the better? That’s more mixed.

The first one (12.5 months after founding):

A $50m total exit the first time wasn’t enough to make anyone a billionaire, even coming after just 1 year and 1 round of funding.

But I made enough money selling my first start-up to (x) not work for “the man” again and (y) fund the prototype and pre-seed for the second. That saved some material dilution, and in the end, also got us probably a 20% higher valuation. More importantly, it gave us time. Time to figure out what to do the 2nd time. Time to make a few mistakes. Time to drop 1 project that didn’t work for another that did (Adobe Sign / EchoSign). Time to really work on it for a year before “go”.

And yet … and yet … because 2/3 of the co-founders had “small wins” under their belts, that led to tension. Tension I didn’t have the first time. Tension that we had to do better, and quickly, for it to be worth the time.

That tension led to one co-founder quitting, and another almost quitting. The tension of “oh yeah I did better before so this isn’t going well enough so I am wasting my time”.

That tension wasn’t healthy, and in end, while we did well in spite of it … we could have done so much better without. So much better. In the end, we sold just as it got good ($1m MRR/$12m ARR, 140% net revenue retention, 100%+ YoY growth, cash-flow positive).

I think without the first exit, I couldn’t have funded or done the second. And yet … if none of us had a win under our belts, I think maybe, we would have done better. There would have been more collectively, 110% commitment. No one would have walked out the door. No one would have threatened to fire anyone else. We would have just hunkered down, and turned 10 customers into 20, then 100, then 1,000. Just faster and with less drama.

I made enough money selling my second start-up to not have to worry for a long time in the third one about making any money from it. That is different. Is this better? Well, yes and no I think. The pro is it’s much easier to go long when you don’t have to worry about paying the mortgage. The con is perhaps, it can take some of the fire out of it. If you don’t quite hit the plan for this year — the world doesn’t end.

Everything I’ve done, in the end, I’ve had the fire. But the why was different.

  • First start-up: To Do a Start-Up. Ourselves.
  • Second start-up: To Do It Again, But Bigger.
  • Third start-up (and fund): To Do Something That Matter, and Endures.

If you want to see my very favorite talk on doing it better, but also differently, the second time, check out my interview of Lew Cirne, CEO of New Relic:

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