Multiple Valid Business Games

Shaan Puri and Sam Parr discuss how different business approaches can coexist, with a focus on VC funding versus bootstrapping. They emphasize that neither path is inherently wrong - it's about choosing the game that aligns with your goals.

• Don't Hate the Player, Hate the Game

  • VCs aren't choosing their strategy arbitrarily - they're playing the optimal way given the rules
  • The nature of innovation means some companies become huge while others fail
  • Players will naturally find and use the optimal strategy to win

• Multiple Valid Paths Exist

  • VC-backed companies aim for massive outcomes but with high risk
  • Bootstrapped companies can create significant wealth with less dilution
    • Example: Sam's company sold for 8-figures after raising only $1M
    • Took less than 5 years from funding to exit
  • Being an employee is also a valid choice

• VC Investment Profile

  • VCs need massive outcomes to make their model work
  • Most investments will fail, but winners dominate returns
  • Companies must be willing to take big risks to fit the VC model
  • Not fitting the VC profile doesn't mean a business is bad

• Personal Wealth Creation

  • Exit size doesn't always correlate with founder outcomes
  • Bootstrapped founders can often keep more equity
  • Some billion-dollar exits leave founders with tiny equity stakes (2-7%)
  • Less funding can mean less stress and better personal outcomes

• Key Takeaway

  • Choose the game that matches your goals and risk tolerance
  • Don't feel pressured to play a game that doesn't align with your strategy
  • Success can come through multiple paths