I founder friend I’ve known for years reminded me that bootstrapping my company forced me to apply discipline in building my company differently than other founders who were focused on growth (and raising capital from investors). I’ve thought about this a bit, and he’s right.

The margin of error was much smaller for my company. If we ran out of cash, that was it. Game over. Paranoia forced me to dive into learning the numbers early in the company’s life cycle and focus on adding to our cash (i.e., turning a profit).

This type of management style wasn’t always in favor when profitability was less of a priority than growth. After my conversation with my buddy, I’m wondering if that will change. Will founders with a more disciplined approach to running and growing companies be more in demand?

I was asked about my plans for retirement recently. Here’s how Merriam-Webster defines “retired”:

Withdrawn from one’s position or occupation : having concluded one’s working or professional career.

A few years ago, I had the opportunity to take a few months off after rarely taking time off for the last decade. I gave myself permission to disconnect. I wasn’t thinking about anything that resembled work. I wasn’t thinking about how to solve problems; I wasn’t tinkering with new ideas. I wasn’t checking email (regularly). I wasn’t talking business with anyone. I focused on doing things I couldn’t do while I was leading a company, like spending a few weeks with a family member who was recovering from a life-threatening medical condition. I completely withdrew from work.

I enjoyed the time off and being able to reconnect with people. It was a much-needed respite after years of grinding. But I also felt like I was at a standstill. As a founder, I was constantly having to rise to the occasion to overcome the latest hurdle. That kept me in perpetual learning and growth mode. I didn’t always enjoy the things I had to work on or learn as a founder, but I enjoyed the personal growth. My time off felt odd because I wasn’t being challenged or growing—not quickly at least. Mental stimulation was missing.

I did learn from the experience how powerful controlling your own time can be. Other people have affected my calendar since I was a child. If it wasn’t a school schedule, it was a work schedule or a business issue or something or someone else materially impacting how I spent my time. But during my time off, my calendar was under my sole control. I wasn’t working on stuff I didn’t want to work on. I wasn’t spending time with people I didn’t want to spend time with. I was in complete control of my time. It was quite liberating.

At the end of my down period, I concluded that my goal isn’t to retire. I’ll never want to retire (in the traditional sense). I’ll never want to walk away from the professional things I enjoy and the mental stimulation they bring. Instead, I want the freedom to work on the things I enjoy and that are mentally stimulating.

My goal isn’t to retire—it’s to control my time in perpetuity. I want the freedom to work on things and with people that bring me joy (so it doesn’t feel like work). If it doesn’t feel like work, I’ll end up doing more of it. I’ll be as engaged and busy as ever!

My retirement plan is to never retire.

I caught up with an entrepreneur friend who’s building a new company—his third start-up. His second start-up has been a massive success. One of the keys to that home run was his first company, which many people don’t know about. He doesn’t run it anymore, but he still owns it.

Company number one is of modest size, has a small team, and doesn’t grow much. But it’s highly profitable. Over more than a decade, he’s been able to use the cash from this predictably profitable company to fund his personal income needs. This took the financial pressure off, giving him the freedom to work on his second start-up without needing to take a salary in the early days. And he could delay raising venture capital until after the product was built and had material customer revenue.

He essentially built a company to generate cash flow to support his family and then built a high-growth company that compounded his family’s wealth. Now, he spends his time doing things he enjoys, like solving the problem his third company is addressing.

I was talking to a friend who’s a big Warren Buffett and Charlie Munger fan. He shared his views on their long-standing habit of buying cash-flow-generating companies and holding them forever via Berkshire Hathaway and the Daily Journal. I’m familiar with both and with their styles of investing, but my conversation with my friend made me want to dig a little deeper.

Before Berkshire Hathaway, Buffett was investing in publicly traded companies with money from limited partners. It was 1956. He was twenty-five years old when he became an investor entrepreneur by starting Buffett Partnership, Ltd. with seven limited partners (almost all of whom were family) and raising $105,000.

Buffett is well known. He went on to have a wonderful track record as an investor. But what really intrigues me is the fact that he didn’t want to work for anyone else. Deciding to bet on himself, he started his investing partnerships. That’s strong entrepreneurial spirit combined with an investor’s mindset.

I want to learn more about his mindset in those early days and how he went about building his partnerships and investing in other companies. Buffett regularly wrote letters to his limited partners. I’ve decided to read all those letters to learn more about his early days, his entrepreneurial spirit, and, hopefully, what led to his outsize success.

Today I talked with a founder looking to start a new brick-and-mortar business. His model is interesting. He’s renting out space in a building designed to cater to an overlooked segment of entrepreneurs. It’ll be recurring revenue, and he already has a few customers committed once he launches. We talked through capital for his project. The revenue potential of the business is capped based on the square footage of the real estate, so it won’t be high-growth. He wants to do debt, but he’s faced some hurdles in getting financed with banks because their underwriting is more conservative. Venture capitalists would love to invest in him, but that isn’t an option because the company isn’t high-growth.

We started talking about the perfect situation for him, and it ended up being a mix of equity and debt. The equity would be permanent capital, meaning the investor isn’t targeting to sell in a certain number of years like a PE or VC fund. They would plan to be an owner and receive profit distributions in perpetuity. The debt would be normal term debt with fair terms. The kicker is that he’d like to do this type of deal with a single person or capital partner.

The more we talked about it, the more I thought about how big the market is. Many entrepreneurs building traditional businesses would probably benefit from a capital partnership like this, especially if interest rates stay at current levels or go higher.

This week I’ve connected with two founders approaching the end of their runway. One of them is out of cash and terminating employees. Another has three or so weeks of runway left but just agreed to terms on a new financing round. The founder is glad his company will live to fight another day. He’s sad about the expensiveness of the capital.

The round will be a down round. It will have a significantly lower valuation than the prior round and includes other terms that will leave previous investors and employees with little to no equity in the company. Existing team members will have equity, but materially less than before. The company will survive, but the CEO is aware that this round will have a negative impact on the company’s culture and relations with employees and previous investors.

Raising capital was challenging in 2022. Some founders opted to use their runway and wait until things improved in 2023. But things haven’t improved as much as they’d hoped. Many are at or near the end of their runway and must make difficult decisions.

The collapse of Silicon Valley Bank has heightened people’s awareness of uninsured deposits—deposits that aren’t insured by the FDIC if a bank fails. The limit is usually $250,000, but it can be more in certain situations.

Today I read a Bloomberg article about this topic. It discussed various ways a depositor can increase their FDIC coverage. The main way is to use a service that spreads your cash among accounts at multiple banks. The more banks you spread your deposits across, the more aggregate FDIC insurance you have and the lower your uninsured-depositor risk. The article went on to include a list of players who offer this service. The article is definitely worth a read if uninsured deposit risk is a concern.

The article also subtly mentions that these products offer competitive interest rates as compared to traditional depositor accounts at traditional banks. This is a win for savers that haven’t seen rates on deposit accounts keep up with the Federal Funds Effective Rate. The willingness of depositors to move funds to different institutions and search for higher yields will likely have a bigger impact than many people realize. For the first time in a long time, banks will have to compete for deposits and reward those who save—something we haven’t seen in almost twenty years.

This week I received a somber update email from a founder. I’ve known him for years and supported him whenever I could. I didn’t invest in the company, but he keeps me on his update email list so I can track his progress.

This email said they’ve run out of cash. They’ve been trying to raise capital for months, with marginal success, and they’re nowhere near breakeven. Employees are being terminated.

I wasn’t totally surprised, but this was still sad to read because the CEO and his team have put years into building this solution. I believe the problem they’re solving is real and experienced by a segment of the population. But I suspect it isn’t painful enough for a material number of customers to happily pay to solve it. Said differently, this solution may be more a vitamin than a painkiller.

In an environment with abundant, cheap capital, companies building vitamins can raise capital. When capital is expensive and less abundant, these companies will struggle, and some will fail.

Earlier this week I shared my thoughts on people being less inclined to fit their lives into their work. Here’s a little more on that. I recently spoke with a venture capital investor at a prominent West Coast fund. She shared that she’d reevaluated where she worked. She concluded that the West Coast, with no support system and her aging parents thousands of miles away, wasn’t conducive to a good life with a young family. She ended up moving back to her hometown and working remotely, with the firm’s support.

I’m glad she was able to make a move that works for her family without limiting her options professionally. It’s encouraging to hear that her firm embraces this for her and other team members. I’m curious to see how venture firms react once they realize founders are making similar evaluations. Founders are likely to want to build companies in locations that suit their personal lives rather than relocate to be closer to Sand Hill Road.

I read a quote that stuck with me:

It had long since come to my attention that people of accomplishment rarely sat back and let things happen to them. They went out and happened to things.

                                                          – Leonardo da Vinci

Are you driving what’s happening or being driven?