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.