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We need a middle class for startups

neilthanedar.com

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Re: We need a middle class for startups

#141

Post by westcort »

My key takeaways:

1. Remote work, no code, social media, and ecommerce platforms all make it easier to bootstrap new businesses from zero to revenue

2. (From Wikipedia) Mittelstand commonly refers to a group of stable business enterprises in Germany, Austria and Switzerland that have proved successful in enduring economic change and turbulence. The term is difficult to translate and may cause confusion for non-Germans. It is usually defined as a statistical category of small and medium-sized enterprises with annual revenues up to 50 million Euro and a maximum of 500 employees

3. There are hundreds of YC-backed startups stuck at ~$1M revenue that can predictably grow to $10M+ revenue with the right team and funding structure

4. Many VC-backed startups would be better as Mittelstands

5. My first business, Avomeen, is a classic Mittelstand

6. Mittelstands are already about one-third of our whole economy

7. Mittelstands can launch and get profitable for <$1M

Re: We need a middle class for startups

#142

Post by JumpCrisscross »

TA-blahhh wrote: post #135
coderholic wrote: post #103

Totally agree with this article. It's not just about funding methods, but also playbooks for these types of businesses, and best practices. I've bootstrapped IPinfo.io to millions in revenue and a team of over 20 - so we're squarely in the "Middle class", and there's a tension between the "bootsrapper advice" (which mostly applies to optimizing for lifestyle and eliminating any risk) and "VC backed advice" (which mos…

"millions in revenue and a team of over 20" are not "Middle class"...

This article is about re-branding the middle market, which is typically defined as $10mm to $1bm in revenue, as this middle class. (Less than $10mm steady-state revenues is typically a small or medium-sized business.)

Re: We need a middle class for startups

#143

Post by JumpCrisscross »

bradgessler wrote: post #139
limedaring wrote: post #125

Earlier quoted context omitted.

Tracy here from TinySeed, thanks for linking to our thesis! Point of clarification: we don't do profit-sharing. Instead, we are equity owners. So when a company gets to the point of success where they want to take money off the table, they can issue dividends (and TinySeed get's a pro-rata amount of those dividends). I find this is one of our most unique points and aligns the incentives of the founder with TinySeed.…

You should add that you cap founder salaries at $250-$300k/year (if I remember your terms correctly) If you’re a founder looking at TinySeed, what this means is that if your business reaches a level of success you can pay yourself over $250k-$300k through your W-2, you’ll either have to cap it there or pay the rest through dividends. That said, this isn’t really a terrible setup if you plan to go down this route. The…

> IRS takes issue when tightly held C-corps pay themselves large amounts via W-2’s because they would want to reclassify those as dividends

Isn’t dividend income taxed less than W-2 income?

Re: We need a middle class for startups

#144

Post by carimura »

TA-blahhh wrote: post #135
coderholic wrote: post #103

Totally agree with this article. It's not just about funding methods, but also playbooks for these types of businesses, and best practices. I've bootstrapped IPinfo.io to millions in revenue and a team of over 20 - so we're squarely in the "Middle class", and there's a tension between the "bootsrapper advice" (which mostly applies to optimizing for lifestyle and eliminating any risk) and "VC backed advice" (which mos…

"millions in revenue and a team of over 20" are not "Middle class"...

what is it then? $ raised and trajectory are also part of the story.

Re: We need a middle class for startups

#145

Post by kevinventullo »

TA-blahhh wrote: post #135
coderholic wrote: post #103

Totally agree with this article. It's not just about funding methods, but also playbooks for these types of businesses, and best practices. I've bootstrapped IPinfo.io to millions in revenue and a team of over 20 - so we're squarely in the "Middle class", and there's a tension between the "bootsrapper advice" (which mostly applies to optimizing for lifestyle and eliminating any risk) and "VC backed advice" (which mos…

"millions in revenue and a team of over 20" are not "Middle class"...

That’s about the scale of a single Jimmy John’s franchise location.

Re: We need a middle class for startups

#147

Post by roflyear »

bityard wrote: post #130
roflyear wrote: post #3

Am I the only one not interested in taking advice from someone who has largely been massively successful? I always feel like these are the people who generally have nothing of real value to say, they just think they do because of their bias from their success.

Do you believe that all successful people were simply lucky?

Depends on your definition of all, successful, and lucky.

If you change successful to be defined as people like OP, I believe a large majority of successful people are extremely lucky. Probably over 99.9%. They owe their success to being extremely fortunate in a combination of many factors, not limited to:

- Where they were born

- Who their parents were

- What food their parents gave them when they were kids

- What other types of nurture they received

- Where they went to school

- When they went to school

- Who they met at school

- Who their parents knew

- The time they were born

- The time they ...

You can go on and on here ...

Re: We need a middle class for startups

#149

Post by Etheryte »

coderholic wrote: post #103

Totally agree with this article. It's not just about funding methods, but also playbooks for these types of businesses, and best practices. I've bootstrapped IPinfo.io to millions in revenue and a team of over 20 - so we're squarely in the "Middle class", and there's a tension between the "bootsrapper advice" (which mostly applies to optimizing for lifestyle and eliminating any risk) and "VC backed advice" (which mos…

Isn't what you're describing just running a regular company?

Re: We need a middle class for startups

#150

Post by roflyear »

brightball wrote: post #69
roflyear wrote: post #28

Earlier quoted context omitted.

I guess my point is I always feel like such advice is really just a bunch of hot air (so little or no substance) and not really advice at all.

I'd just recommend not painting with too broad of a brush. One of my favorite stories about Dabo Swinney, Clemson's football coach, came when he had just gotten the job and very few people had any confidence in him. ESPN rated him as a D+ hire at the time. He sat down at a coaches dinner event and a much older retired coach named Bill Curry was at his table. They struck up a conversation and Bill said, "Dabo, congrat…

I agree, I don't mean to suggest you should discount advice just because someone is successful.
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