You’ve exited your startup, now what?

Zero to one, back to zero?

I faced this question back in 2015 after I exited CloudX, the world’s first organised marketplace for mobile devices. It’s something you don’t tend to think about or plan for when you’re setting things up.

In his book, Zero to One, Peter Thiel, questions the system that sucks entrepreneurs in, helps them build global value, then takes their money and puts it to unproductive use in the financial system. Unproductive, not in the absolute sense, but compared to entrepreneurial activity. This is an excerpt from Zero to One:

“Finance epitomizes indefinite thinking because it’s the only way to make money when you have no idea how to create wealth.

The indefiniteness of finance can be bizarre. Think about what happens when successful entrepreneurs sell their company. What do they do with the money? In a financialized world, it unfolds like this:

1. The founders don’t know what to do with it, so they give it to a large bank.
2. The bankers don’t know what to do with it, so they diversify by spreading it across a portfolio of institutional investors.
3. Institutional investors don’t know what to do with their managed capital, so they diversify by amassing a portfolio of stocks.
4. Companies try to increase their share price by generating free cash flows. If they do, they issue dividends or buy back shares and the cycle repeats.

At no point does anyone in the chain know what to do with money in the real economy.”

Elon Musk famously, and in a glorified story, exited PayPal and reinvested all of his proceeds of $180m into SpaceX, Tesla and Solar City. He had to borrow money for rent!

Probably, the most dramatic of all, Bill Gates would’ve been better off keeping all his wealth in Microsoft shares rather than diversifying into other assets.

While these stories may not technically be practical nor true, the morale of the story is that if you have a good business that motivates you, hang on to it with your life. If you’re creating value, continue doing so. If you love working with your team, don’t give them up easily. At the end of the day, much more important than the financial wealth you generate, are the shared memories and successes you have with your team and community.

This is the fourth in a series of posts about Conscious Leadership applied to Global Entrepreneurs which was also posted on LinkedIn. We’d love to hear from teams with crazy (but commercial) startups. Get in touch or attend our breakfast series. Finally, don’t forget to get your IV Score to prepare for your next VC meeting.