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Comment by mitochondrion | Hacker News Reader

Not to nitpick, but I don't think that you really mean to say "lifestyle business". When I think of a lifestyle business, I think of a smallish, relatively passive revenue generator.

I think that there might be roughly three types of companies: those financially backed through equity, small passive-ish businesses that allow the owner to go off and live their "lifestyle", and boot-strapped (equity intact) active corporations.

Personally, I want to retain all equity/control and would choose to dominate the market rather than milk the profit margin.

Anyway, maybe I've missed the mark. I'd love to further flesh this out.

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Actually a lifestyle company is pretty much the term for any business that makes a great living for the owners and employees, but never results in significant profit for investors.

Investors won't touch a company with a 10 foot pole if they get a whiff of lifestyle corporation because they'll never get their investment back. But this doesn't make it a bad company, despite what you read around here on HN. In reality a lifestyle company can be just about the greatest, most satisfying and financially rewarding job that you can have. You just won't get any investor telling you that because there's nothing there for them.

> Investors won't touch a company with a 10 foot pole if they get a whiff of lifestyle corporation because they'll never get their investment back.

It's not actually that they won't get their investment back. It's that they won't get it back in a form that really works for them. If I were to offer a VC an investment plan that would mean reliable payments of 30% of what they invested every year starting in five years and continuing forever, that would not be an attractive deal. Would they get their investment back many times over? Sure. But the thing is, it wouldn't happen all at once as a large payoff.

Yea good point. They would probably be more likely to get their money back actually, but it won't be a massive payout.

By lifestyle business, I mean one which is a lifestyle, rather one that is tied to the exit strategies of investors. This ranges from a small retail outlet to a growing software firm that is bootstrapped.

The difference is that you are interested in long-term earnings on your revenue, not in making it big by selling shares (either via the stock market or by selling the business). The real difference, I think, is that a lifestyle business is not for sale. And that's a deal breaker if by an investor you want to make money by selling your interest.

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