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"My friend sold his company for $5 million. He walked away with $140,000. After four years. That's $35,000 per year—less than an entry-level Google engineer makes in two months.""VCs need deal flow. They need founders to believe in the dream. If founders understood they might work for years and get nothing, fewer will raise.""Every single VC has seen this happen dozens of times. They know the math doesn't work for over 90% of companies, but they don't say it because their job is to keep the machine running.""You're not building a sustainable business—you're building a fundraising machine.""For the first time ever, we can hold our destiny in our own hands. And that's the exciting part."
Founder Reality with George Pu. Real talk from a technical founder building AI-powered businesses in the trenches. No highlight reel, no startup theater – just honest insights from someone who codes, ships, and scales.
Every week, George breaks down the messy, unfiltered decisions behind building a bootstrap software company. From saying yes to projects you don't know how to build, to navigating AI hype vs. reality, to the mental models that actually matter for technical founders.
Whether you're a developer thinking about starting a company, a founder scaling your first product, or a technical leader building AI features, this show gives you the frameworks and hard-won lessons you won't find in the startup content circus.
George Pu is a software engineer turned founder building multiple AI-powered businesses. He's bootstrapped companies, shipped products that matter, and learned the hard way what works and what's just noise.
Follow along as he builds in public and shares what's really happening behind the scenes.
New episodes every Monday, Wednesday, and Friday.
George Pu (00:00)
Hey everyone. Welcome back to Founder Reality. I'm your host George Poo. And today I want to share with you a shocking fact from a friend of mine who actually built a successful company for the past four years, raised a successful seed round that everyone is envious and jealous of. And he has built a successful product that's existently on the market. He has real users. He has a team, he has an office, and finally his company got acquired for $5 million. But do you know how much he actually walked away from personally?
with that $5 million, he walked away with $140,000 in total for his four years of work, right? Let's do it again. $140,000, which basically equals to $35,000 per year. And unfortunately that's less than entry level engineer working at Google makes, right? Who makes $260,000. So whoever is working at entry level software engineer at Google,
actually makes whatever this founder of front of my makes in less than four months. And this is ridiculous. And I ran the math, um, last week as well. That's why I feel like compelled to share this on social media and all of a sudden he blew up and I thought, you know, it's a good, um, story to share. And also more importantly, I want to share the math behind it and also how other founders, no matter if you're a bootstrap, no matter if you're actually building a successful company or have already raised.
I want to show you the successful, like what success means, right? In this context and how can you actually be on the other side if you're unfortunately trapped in this game? So you might ask, how did my friend get $140,000? Is it because it's just a salary, his getaway money? Is it because he failed? Like what is going on? It's very simple. It's something that's called liquidation preferences. So I'll talk about it a little bit later, right? But the reason why he failed is not because it's actually not because he failed. He successfully sold his company.
for $5 million, right? And the headline on LinkedIn, on press releases, on investor websites that this company has been successfully acquired for $5 million. That is real. And yet he only walked away for $140,000, right? It's not because of fraud. It's not because he failed, but because of two words, like I said, that's buried in a term sheet that everybody signs. Every founder signs this, right? And they didn't realize and understand it when they signed, but it became a
you know, significantly more important that they made a mistake. that here's the thing that broke my brain. this is called liquidation preferences. Right. So, and I also want to show you guys, a lot of you guys might not have never heard about this term, liquidation preferences. What does it mean? So I'll use an example that all of you guys have known already, right? Another example, the company called DraftKings, you know, the household name, the Superbowl commercials, the app on millions of phones, the one you can bet, right? You can bet.
And, uh, you know, pay prices, different things. So the founder got $0 when they were acquired. It's a household name, right? All of us know about it, but it also still only got $0. And my friend who was a humble guy, who was the same age as mine, four years of their life, building this thing, you know, their early twenties essentially gone and getting basically zero out of, after four years. And, and he's smart.
He's a technical person. He knows exactly how it works. He has a, you charisma of basically being a CEO and CTO at the same time. And unfortunately he could, he could have gotten a job at Stripe. couldn't job at Shopify. He couldn't job anywhere else. And yet he chose his path and raised money. And now he's just, unfortunately being beaten to, you know, basically be getting away with nothing. So as my tweet went viral, a lot of people tell me that you don't know how this works or, know, George, you're just making up numbers. You're scamming founders. You're letting them.
You know, you're letting them imagine that the VC path is broken, you know, you know, that's why I thought like after so many of those comments and I checked and I was okay. There are actually a lot of people disagreeing with me. And I checked those people are VCs, advisors and lawyers, the same people who benefit from keeping the ecosystem going, keeping the status quo going. Right. And the thing is like, actually do understand how it works. I do understand exactly how it works.
because I should try to raise a VC fund four years ago, you know, with one of my friends. So I know the math and I'll tell you the things that they don't want you to hear.
So let's talk a little bit more about my friend's story because it's super important. So in early 2021, my friend closed her seed round, right? And it was, I remember it was $3.6 million. Everyone was celebrating. The press release was going out. The Twitter was blowing up LinkedIn posts. You know, people actually commented with champagne emojis. I remember I even commented that congratulations, right? They have just raised $3.6 million. A huge amount. I remember that night when they posted it.
They were excited, validated, you know, and finally, and they did work very hard for it. They basically work on the past year on the product before they raise any money. So they finally could quit their jobs and build full time. They can hire a team that can do this properly. And I was really happy for them, right? I thought they'd won. I thought that was it. Right. And the next couple of years has been really hard, but I want to break it down to you every year on a yearly basis so you can see exactly what's going on and judge it for yourself. And unfortunately,
I think this is the same journey for many founders, not just my friend, but many founders. So year one, you know, they are in the building mode, right? There are beta testers or alpha testers. There are basically literate like, you know, iterating on the features. They're getting really close to lunch. Every time we talk and have a coffee, right? It's almost ready. They always say it's almost ready. They want it to be perfect before showing it to the world, which I get it, right? Because you just raise a $3.6 million seed fund.
seed round. And of course, you want to get a really good first impression to everyone who's seeing it. You want to show it to investors that you got it, you want to show it to employees that this has potential. And also they have competitors, of course, they want to build something that you know, everyone thinks this is good. This is great. Right? You don't get a second chance at first impressions are complete and totally get it. Year two, they were still building, they were still refining, you know, the markets moving very fast, but they are confident, right? They're confident that when they launch
It's going to be so good that the weight will have to be worth it. So I sent out for the waiters as well, alongside with many of my friends from Waterloo. So, um, you know, their burn rate was high. They did hire more people. They hired designers, they hired go to market people. So team of nine people in total, they're paying everyone good salaries, nice office. They were doing everything right. Right. That's the word. And the third year in December of that third year, they finally launched, right? At this point, quite frankly, I thought it was a little bit late later for lunch, but that's fine.
still like you might, they might have some commercial secrets. They might want to make sure it's perfect. I totally get it. And I can see the top launch post. was a beautiful product. They hired a specific, ⁓ agency, which I wouldn't name here, but they hired a very successful design agency to design everything front and center. Right. It was a beautiful product. It was a clean design. And of course I can see that they have poured the hearts into it's the intro email, the onboarding flow. Everything is like just like elegant and perfectly done.
And exactly the style I would like it. Right. So I was sometimes even wish, okay, I can build product like that. But of course it takes patience. But then what happens is I don't hear from them for another month. Their Twitter is like quiet for three weeks and everything else is quiet. When we finally did walk, you know, we walk along the park and we were talking about, how's it going? Right. Unfortunately, the founder were very, you know, my friend was very quiet. Right. I asked like, how's it going? And there was like a long pause for a few couple of seconds.
And he basically told me that users came, which is good, but 90 % of them basically left when the first few days. Right. And I, and I was like, basically standing there, was like, okay, 90%, right. The market has moved significantly. And I was actually personally in the shoe of basically having 90 % drop down. When I was in one of my internships, we have launched a product. and the product was essentially solving a problem that we thought people would care about. But when we launched, yes, we got.
You know, over millions of signups, right? That's just crazy. We, we hacked the growth. got millions of signups, for the company I was working with. And unfortunately we did have over 90 % drop off rates. I remember it was even higher than 90. I think it was 97 % drop off rate. So I exactly understood how painful that would have felt. I have domain expertise in basically filling 97%, but my friend, he's been spending like the past two years building this thing and, and, and, launching December, you know, like.
It's, it's, it's obviously not the audience as far as that. Obviously not the customer's fault. Right. And the market has unfortunately moved on when they built out a comp, you know, like a lot of competitors in a space of launch and also chat GPT was introduced. Cursor was introduced a different other AI tools now that people can build products quite easily. Right. So they were basically launching at a bad time. So by the time I friendshiped, the game was already over for them, right. It's, it's already gone past the day where they need it. So.
So I wanted to share a little bit nuance here, right? Like we're not talking about launching too slow and then eventually they fail. So that's not the story here, right? Of course, launching too slow might have contributed to them being bought for a cheaper price and they would have wanted, but that's not a story. Let's move on to year four. Year four is a story where I personally visually saw the mental decline and physical decline in my friend and they were fighting. They were fighting really hard. They were pivoting, pivoting a few times, I think three times at least.
changing names, changing product names, changing emails, changing branding, changing social media handles, everything they try to try to fix retention. They're burning through what's left of the money that they're they're raised 3.6 million. Every conversation I can hear in their voice, the exhaustion, the realization that this might not work. But the problem is like, my friends were not lazy people. They're not scammy founders. Yes, they did raise money in 2021, which is like a year where a lot of companies do raise. That's true.
However, you know, the problem, the problem is that they're not lazy. They're on the office on the weekends or crunching, they're grinding together with their team. Their team doesn't sleep until like, you 2 AM in the morning. They were still crunching the numbers together, still doing design mockups together, even at 10 PM at night. So those, this team is definitely not lazy and they are motivated, which is why it's so hard to see them fail. And they're not stupid. You know, by the time it was in year four, they can see the writing on the wall. They knew.
that their product is not working. They knew their competitors were raising more money and their competitors are launching faster than them. So unfortunately, that is the truth of what's going on. They just don't know how to stop the train. And unfortunately, we have reached year five, right? Which is essentially now. Then I unfortunately did get a call from him and it was like late at night. I remember it was like 11 PM or something. And he was basically telling me that, you know, we are probably going to have to sell or shut down, right? And then
We were basically doing numbers together and I still remember doing the numbers with him. was like two hours on the call and it was just like super, super depressing to be on that call because numbers, you know, and, and I, quite frankly, I don't see term sheets quite a lot. You know, I don't see saves quite a lot as well. Like these things I haven't been in the fundraising space for the past three, four years. So everything's like sort of new to me again. And he was basically asking me if we sell how much we to get. And that is when I realized.
There is a term that's called liquidation preferences. And I found it, the liquidation preferences clause. I read it. did a math and essentially I told him that if you're lucky and then get acquired, you'll probably make around 140,000 yourself for four years of work. And I didn't tell him, but I knew it. It's like $35,000 a year. You know, so that was like that call and I still don't want to
You know, really talk about it that much, but I would say that, you know, he is not a lazy person. His team is not lazy team. And when they first raised money in 2021, it was, it was all about. It was all about like, you know, going to billions or at least like hundreds of millions or an exit. That's like 50 million, a hundred million ish, right? But that was a dream. Everyone who's going on the founder path, who's raises VCM investor money wants to go that route. And of course the investors want to go that route as well. But the problem with liquidation preferences is that.
They have raised $3.6 million. So the company essentially needs to sell for at least $3.6 million before my friend and the founders see a single dollar. And that's called liquidation preferences. And that is the thing that most people don't actually know about. Right? So the problem is like, even if they get acquired for $5 million, which, which is the example I use, which would have been a win, but this is what happens. I'll do the simple math with you guys, right? The first $3.6 million goes to investors to get the money back.
So what's left of that 5 million is $1.4 million. Right. But my friend, unfortunately doesn't own a hundred percent anymore. After dilution, after giving equities to investors and of course, splitting it a little bit with the team, early team members, co-founders, the founders probably own about 20%. Right. And you know, the, their share is worth $280,000. And after taxes, capital gains, all that it's $168,000.
And after four years, you know, that is just, unfortunately, $42,000 per year. Right. That is, I'm not sure if that's below minimum wage in many provinces, many states, but it is a very extremely low number for someone who's intellectual, hardworking and poor. I know for a fact more than 80 hours a week on this for the past five years, right. Ignoring family, ignoring, you know, even personal relationships, sacrificing everything and going on the path that is like a lot of people were thought were glamorous at a time.
but eventually just faded into, you know, like non-existence, like it's sad, it's sad. And I just don't want more founders to be going on this route and not knowing exactly what they're sacrificing, right? Think about it again, four years of nights, weekends, stress, health declining, relationships strained. And you look at like a Mountain View, you know, California, where an entry level Google engineer makes $240,000 per year.
They will make whatever my friend has made if they exit for 5 million for less than two to three months. You know, and the thing is like, and people will say, Oh, you know, Georgia, I'd own the shares of a company. I own 20 % on 30%, 40%. Yes, you do own shares, but those shares are worth almost nothing. Right. And that's trap where people are trapping you. So when I first thought about raising back in 2021, I was thinking the same thing as you guys. I was thinking, okay, if I raised $2 million of seed round, my company's worth $10 million.
Then on paper, you know, because I own 40%, then I'm an instant millionaire, right? The math looks funny almost at that route, but it is funny for a fact because it's not true. It's an imaginary tower, right? It's a house of cards. It doesn't actually work that way. And when you grind yourself for the next four years and five years, you'll realize that you'll waste your time. And essentially you are basically, you're basically racing against the clock for something that you do not control, which is the federal
interest rates, which is the Fed interest rates and, and, and you have no control over how the Fed is going to increase interest rates or decrease it. Right. And that's the saddest part. The venture cycle doesn't care about how hard you work. doesn't care about how good of company you have because the interest rate changes essentially your performance standards and the standard they use to evaluate you changes as well. And that is so sad because I know my friend had worked so hard and to essentially be
Voided to where they are now. I think it's really sad. So right now my friend, know after that conversation They have a plan of essentially leading off seven people. They'll cap one engineers It's just two people out of nine, you know, which the previous numbers they're giving themselves another six months Which is a little bit sad, right and and they wanted to fix retention or shut down which is the last chance, right? I respect it. But you know, I also Between you guys like I'll of course, I know the odds, right?
Every time we talk, I can hear it. They're not building anymore. They're basically just my engine decline. And if you're working on something for the past four or five years, of course you're attached to it. Right. I just personally sunset at one of our products and it's incredibly, incredibly difficult. Right. It's probably one of the most difficult things a founder can do. It's like sun setting or shutting something down or admitting that you have failed. So for me, it has become easier to admit something that didn't work out because I just realized I don't really care if something doesn't work out. It's still hard.
but I want to broadcast it to you guys. want you guys to know that it's not working out, right? Instead of hiding in the closet. So, but you know, for majority of founders, the unfortunate truth is that a lot of those guys, they do hide it from you guys, right? Because maybe they have signed an NDA with their investors. They don't want to, you know, offend anyone in the tech industry. They don't want to basically burn the bridges with those people if they do try to want to try it again. So, and the reason why I shared this, you know, with you guys is because
I'm not in the industry anymore. I'm not in the VC game anymore. Right. I will never probably never raise VC in my entire life ever again. Right. So I feel like I'm an outsider in this and I can comment on my thought pretty actively by exactly what I thought about, you know, so that is the difference between me and someone who's inside looking in. So, you know, when I posted on Twitter and LinkedIn, a few, I realized immediately like a few founders who I know who have, you know, exited from by Combinator.
who I've raised venture capital, but eventually I have to shut down. They like my posts right away, you know? And then after that, it was basically like being like, being like, being like, and then, you know, the comments are basically filled with VCs attacking me, startup advisors attacking me, startup lawyers, or like, you know, paralegals attacking me on the comments, which is pretty funny. But you know, last time as of this recording, the post on Twitter got 4,500 likes and on LinkedIn, it got over 200 likes, you know? So,
I'm not just making it up. People actually do like what I'm saying about this. It's just like on LinkedIn, unfortunately, you know, people cannot like it because if you like it, you know, your investors are going to see, why do you like that? You know, if you already have raised money or you're aspiring and founder who, you know, liked it, people will be like, why did you like that before? You don't like raising money, right? So people don't want to be offended or offending somebody, which is like the problem with this industry, which I fully respect. I understand, right? It's just like, I personally do not care about offending people because that's not how I operate.
Right. It's that it's as easy as that.
And I just wanted to break down a little bit more about, you know, the type of people who are attacking me. And I want to show you exactly there's their incentives and, know, basically giving the read about what they said and what my take is. Right. So after my tweet went viral, three types of people responded very angrily. Right. The first time is of course, the VCs and advisors, they're saying you're misleading founders. That's not how liquidation preferences work. You don't understand value. Your math is wrong. Right. I understand like perfectly.
Right? Like VCs need deal flow, know, however they're doing right now. They need founders to be able to raise money or at least very minimum to believe in the dream. If founders understood they might work for years and get nothing, viewers will raise, of course, which is what I posted yesterday. I discourage a of founders from the dream of like, it's not having to raise anymore. So I basically, when someone like me says that, you know, on set part out loud, they attack the messenger, which is like a lot of people were attacking me on different platforms.
You know, but here's a part where they don't say they have seen this happen for dozens of times. Every single VC have seen this happen for a lot of time. They know a lot of founders in their portfolio, even who have tried and failed and didn't make anything out of it. Not even 140,000 after four years, zero and zero for a lot of founders. They know deeply the math doesn't work for over 90 % of all companies, but the truth is they just don't say it because their job is to keep the machine running.
Their job is raise bigger funds and charge more management fees and different, you know, raise carries and all that stuff, which have nothing to do with founders. you know, like, and that's part of why the incentives are misaligned. Right. And we do talk about it quite a lot in these days, but, I still think a lot of the industry experts and insiders are still talking about like everything that everyone has to raise VC.
And I think one of the reasons why my posts are blowing up is because people are realizing more and more with AI that VCs are becoming increasingly irrelevant. Right? Like especially early stage VCs. I can't speak to the later stage VCs because essentially part of private equity at that point, but early stage VC doesn't provide as much value for whatever money that you're raising or diluting 10%, 20%, 30%, 40%. It's just not worth it. Right. And, and now with AI, can want a lot of things without having to spend hundreds of thousands or millions of dollars a year.
And that's a fact that's not true back in 2021, but it's true now in 2025. So the VCs of course have an incentive to keep the machine running, which, I understand. I don't respect it, but I get it, you know? So the second type is like, there are some successful founders who've been attacking me as well. Um, I, and, and then when I look deeper, they're not successful founders per se. They did have an exit and which is fine, good for you. And they have to say, I raised money and I made millions.
Great, you I'm genuinely happy for you, right? You are the exception. You are the survivor. Now you're a startup advisor. You're selling your content and whatever. Good for you, you know, but you don't speak for the early stage founders who are being screwed over. You are the exception. You play the game, you won, and you are the survivor, but you cannot pretend that survivorship biases is not real, right? You are the founder who made money and bragging about it. talking about it. However, for every one of you guys who are saying good things about yourself making money,
There are hundreds of others who tried and failed, right? The ones who didn't say it, they just simply silent, right? It's like a World War II, you know, like playing analysis, right? Like they're basically taking analysis about which part of the plane is shot. And that's called survivorship bias because we're only looking at ones who are successful and no one who's ever failed posts about it, right? Because it's embarrassing. It's admitting that you don't know anything that we're doing. And most of us just don't do that, which is sad, but it is a reality of today's world.
So I think they're a simple size just simply does not represent data well enough, although I respect they have exited and good for you, right? But you are not, ⁓ coming to say that, you know, this is how it's done because it's not right. And the third type of people who are attacking me are essentially people who have never done it, right. Which is, which is basically my favorite group because these guys have not done it yet. You know, they have not created a company, they have not run a company yet, but they have read Paul Graham's essays. They have read why come into startup school.
They know all terminology, you know, they even know about liquidation preferences, participating rounds, preferred, anti-delusion clauses. They know all of that. Great. Amazing. You must be coming from finance or something. But the true problem about those people is that they have actually never negotiated a term sheet. They have never, never set through an acquisition. They have never watched a waterfall distribution and they have never seen the final number, right? So they're very confident, which is great for them, but they have zero experience.
So those are people who are loudly telling me that I'm wrong. Right. And of course, are the others or startup advisors who build founders by the hour. There are the lawyers, you know, who are attacking me and there are the VCs, which, which I welcome those opinions. I actually responded very positively with most of them on LinkedIn. Um, but I have to say that a lot of people actually stay quiet, especially on LinkedIn, which I think is more like more telling 150,000 people saw the post on LinkedIn.
And not a lot of people actually commented or liked, right. And people who were like, like I said, they liked the post because they have already exit the game. They're in a new game now, right. They're not no longer looking to raise VC money. They're no longer looking to get into Y Combinator anymore. And the founders who've been through all this didn't tell me that I was wrong. They didn't comment and attack me. And there was over 130 of them. Just think about it. There was over 130 of them adding me on LinkedIn or who are already connected to me.
And the DM me saying that, thank you for saying this publicly, you know, 130 people plus, right. And I haven't even counted Twitter yet, but this is crazy. This is crazy because there are so many people who are telling me that like for thanking me for being able to say this publicly and their lawyers also startup lawyers who are sending me messages about, know, I have clients who fail that way as well. You're a hundred percent right, but I cannot publicly click like, I cannot publicly say thank you, or I cannot have the comment on that.
And I got it, you know, and I even have Android investors who I've known from the past who are basically saying that they watched this scenario play out so many times and already three times this year so far. So these people knew and they stay quiet, right? And that's okay with me, but they still had to play the game and I don't, right? SimpleDirect and ANC pays my bills. I am profitable. I don't need to raise. I don't need to keep VCs happy. I don't just stay in the game or whatever that is. I can tell you the truth because that is the truth.
And let me tell you what I've noticed, right? There's a pattern for founders who raised and there's usually a few phases of that happens. If you're interested, here's how it works, right? The first step is always a celebration, right? And you see that a lot in 2020, 2021 founders raise money. There's this LinkedIn post, there's Twitter posts, there's press release and the congratulations start pulling in. And yes, I was, you know, dreaming of becoming a founder just five years ago. Right. And so I cannot say I'm too innocent about that.
So, you I was the one commenting as well. So proud of you guys. You're going to kill it. This is just the beginning. So congrats on the race, all that stuff, right? Everyone has started to treat like treated like that. You have won the game, right? Except that you haven't, you just took on debt that you cannot pay back unless it's a home run. And the unfortunate truth is that a lot of us don't even look at the liquidation preferences clause that much. We don't read our saves. We don't really read the term sheets. So it's just like, you know, legal jargons, what does it even mean? We'll just use standard templates.
provided by Y Combinator or, you know, LawDeePod, right? Like, you know, what's wrong with that?
And there's nothing wrong with that. have to say that's a standard call. So if you're raising money, of course, investors are going to demand one time liquidation preferences. But the thing is of all that, it feels like winning, right? That's the first step. It feels like winning and that's a trap and you haven't even trapped as soon as you took the money. And the second step is called the treadmill, right? You hire, you build, you burn money every single month. And the unfortunate thing is there's the thing called runway, of course. So every month the clock ticks down.
The wrong way is shrinking and the pressure starting building and you need to grow just fast enough in order to raise next round. Because if you don't raise again, you're going to die, right? Your company is going to not make it. So you're essentially not building a sustainable business because building a sustainable business means that you have to sacrifice the returns. Your, your investors have to sacrifice the returns and that's not, you're going to be doing here for you. You're raising money because you're building a fundraising machine, right?
And the third step is the reality. So two things can happen at the same time. Like two things can happen. That's option A is like, you don't raise the next round. You run out of money, you shut down, you have $0 made, you know, over the past four or five years. So unfortunately this happened to a lot of people that I know who just simply cannot raise series A because the bar of raising series, have just got increasingly significantly higher because the feds policies, which has nothing to do with founders, unfortunately, but a lot of people shut down and they got zero dollar all of it.
But I just think like that the amount of years they have wasted on this is just like so sad. And then you're essentially have to start fresh again after so many years, right? You might do a startup again. You might raise again, or you might just like go back and find a job, you know, all these things require you to start over again and the past four or five years, as such as it doesn't mean anything, which is sad. And option B is like, you know, it's rare, but it doesn't happen to a lot of funders, right? You do raise next round, which is like, if you raised C before, now you're raising series A, you're giving up another 25 % to 30%.
And now you need an even bigger exit to make anything right. The goal post just keeps moving further away, raising series a, and now you had to worry about raising series B. And of course, at this very moment, it's not easy to do that, right. Let's just be honest. And the last step is maybe a step it's called the exit, which is why everyone raising venture runs once, right. If you're lucky and you have to be very lucky to be honest, to get acquired. And then that will be a press release, LinkedIn celebration. And basically like, you know, people are saying, we're proud of what we have built together. Congratulations.
And then you do the math, right. And the math is a brutal part. after the equation preferences, after the illusion, after taxes, after everything, maybe you get something and maybe you don't. Right. And if you don't, you can say there's NDAs, there's reputation, the game continues. You have to protect your investors, privacy and all that. And then the step five, which is like the silence, right. The next founder sees your success story because the headline is, you know, this company has itself being acquired for $25 million, $15 million, you know,
75 million, a hundred million dollars or undisclosed amount. Well, but it's an exit, you know, but this successful company bought them. So they must be successful. Right. And those founders who said, I want that as well. I want that for myself. Right. And I don't, and unfortunate things, they don't know that you got zero and because you can't tell them. this virtuous cycle just continues. And the reason why it continues is because everyone in the ecosystem benefits from you as a founder of raising capital.
VCs get your flows so they can raise bigger rounds. They can know more people from you and lawyers get transaction fees and they give money from basically working on deals, right? Accelerators get their costs, 7.5%, 10%, 15%, whatever. Advisors get paid as well. So nobody gets paid, you know, thinking about nobody gets paid when you say, actually, I'm going to be bootstrapping and stay profitable. Nobody cares because you're not going to be paying them if you stay profitable. If you're doing well personally, doesn't mean they're doing well with you. Right? So nobody tells you.
The liquidation preferences is an option and nobody tells you being profitable. It's an option. you say you're being bootstrapped, a lot of people attack you in the industry. They're saying it's a lifestyle business. A lot of people attack me for running a lifestyle business. I don't even know what lifestyle business really means. Right. It's like a term that they created to shame people saying like, Oh, you're creating a lifestyle business. I'm creating a unicorn. You know, so, um, these industry terms are very toxic to be honest, and I don't want to play these games with those people. So I'm just not going to comment on a lifestyle business thing.
But I do have to say they do find a lot of ways to basically get to you and attack you. you, if you do dare to say exactly who and who is not good in the industry and name them. And if you're like non-anonymized, they're going to come after you and ruin your life. Right. They'll try at least. So just be very careful. You know, if you're, if you're going to crisis as few specific names, right. I'm not obviously, but I'm willing to tell you guys about the facts that they're not telling you. So. Okay. Finally, you know, I'll tell you guys what is it going to work.
Right. Because I've told you about location preferences and frankly, I wish I have listened to this advice. Like, you know, when I just first started and I was like, I really want to raise venture capital. Right. So the unfortunate truth is that, you know, it is real and your success chances are going to be very, very low, almost minimum. If you're going to do it without strong backing, without being from Silicon Valley, without having product access, it's a game that it's almost certain that you're going to lose. Right. Not, not always.
But 90%, 70%, 80%, do you want to take the chance or failing? Right. But I'm not going to leave you guys and just disappear. Um, that's, that's what I'm going to say. So I want to show you how it actually works. Right. And there are so many alternatives that's out there. That doesn't have to be my friend's story. It doesn't have to be your story. Right. So I've actually been looking into this myself as well. It's like, okay, first of all, it's 2025. Everything is AI now. Right. And you know, like the old way of basically, it's very limiting. It's saying.
You have to build a software product to be successful. Not anymore. Right. I see it being three ways. The first way is the easiest. It's like essentially content business, right? Creating content and personal brand as a business. And this is not hard. Like a lot of people are successful. You've done it. And it doesn't require technical background, right? Every time I say technical background, like in the past, you just used to mean like less than 1 % of people can code, right? I even think it's like even lower than that, but you know, less than 1 % of people can code. So we're basically just getting 99 % of people who doesn't code.
We just take them away. Like that's not fair. You know, that's, they cannot benefit from this tech economy. cannot benefit from making money. Like, don't believe that. So content is a really significant piece of making business, especially in a 2025 world. Right. Some people might say, Oh, George, but like, know, open AI has Sora, Google has a VO and there are different like video tools out there. AI is taking over. Like there's no value of basically making content anymore. But you know, if for my observation,
People are already getting tired of those AI videos. People are getting tired of AI ⁓ generated images. We want as humans, we want authenticity and we want advice opinions from real people. And I don't see that being replaced for next 20, 30 years to come. Or maybe never, right? It's probably never going to be replaced because we crave real people. Even though there might be a robot AI that sounds just like me talking to you guys in the same tone.
Right. You might be like, okay, this AI is trying really hard to sound human. I don't really believe it. Right. And that's essentially how I thought about it as well. So content itself is a really good business. ⁓ I've talked about a little bit more on my blog, founderabout.com. So definitely, you know, listen to that. I'm sorry, like visit that if you can. And essentially how content business work is that you start posting on one platform consistently about something that you're unique about. Right. So for example, for me, I'm talking about, you know, the condition preferences. I'm talking about like doing the math essentially, right. I'm talking about like.
being authentic as a founder and rejecting a lot of the things that doesn't make sense in tech industry. So that makes it unique for me and everyone's unique in their own sense, right? And sometimes it might be harder to come up and think about something, but definitely do think about it. personally, when I first started, I'm just posting casually, right? I haven't really started until this year to post like more consistently, to create content more consistent. This podcast was starting in August of 2025, which is a few months ago, right?
So I'm still trying so you guys can do as well. So it takes about, I think 12 to 24 months to for content business, start taking off and start making, generating meaningful revenue. So keep that in mind. And a second type is consulting revenue, right? And this is probably one of the easiest thing that you can do, especially if you have already started working, right? Or you for graduating, you have some expertise, you have some internship experiences, or you're currently working for someone and you are an employee currently of a large company or small company, whatever.
And you have expertise in, you know, a specific domain, right? The easiest way to start is to basically, um, the easiest way to start is basically start consulting company with just yourself and your skill set and start consulting for one or two clients. And that is one of the easiest way to make 5,000 to $10,000 a month, um, in terms of consulting. So that's the easiest way. talked about a little bit more in my book, which is free by the way. Uh, it's called the anti unicorn.
the consulting way. if you're listening, you're interested on definitely just go to founder reality.com and you can see the menu bar. It says free book. You can get that on there. It's pretty easy. ⁓ and I talked about everything for free. So, you know, ⁓ definitely learned that. And lastly is essentially the harder part, which is like building a software product. I have to say it's not that hard now given that, you know, a lot of the AI coding tools are available, right? So sure. You're starting to know the fundamentals. You can't just like, you know, vibe code it. I wouldn't recommend a vibe coding.
You still have to know a little bit of it, but just like a tiny little bit. So in the past, let's say you have to learn a hundred percent. Now you probably just need to learn about 10%, 20 % of everything you know, in order to build a really successful software product. Right. And, and that's like a good thing because now the bars are a lot lower. So building that now costs a lot less and then you can build it a lot faster. Right. I actually just have, you know, a screen that's next to me. I'm actually writing code before I started, sorry, this pot just jump on this pot. So.
I'm doing it. I'm not a super, super technical person. So if I can do it, you guys can as well. Right. And for my product, I was able to ship it in just under two hours because it was done mostly by AI. So if I can do it, you guys can do it as well. So those are the three paths content. so content we have consulting and we have software and the benefit of all those three things is that they can scale indefinitely. Right. And that's a good thing about it. They can scale as much as we want.
It doesn't require a physical storefront. doesn't mean you have to stay on all the time. Consulting does require you to spend your time, right? It doesn't scale that much. So consulting is the easiest way to get money. And once you get money, you have to switch to either one or three or a hybrid model between all three. So, uh, that's, those are the models that work. So I hope this is the antidote that you guys can understand, right? I'm not just telling you that something is broken, but I'm actually giving you the options of what you can do. And, um, you know, if you're really interested in learning more about what path you have.
I'm actually building a free tool that gives you, you know, advanced coaching, you know, just by going to, you know, get simple, right.com. We have a new product called, create your job by simple direct. So you can Google that as well. It's called quit your job by simple direct. So, you know, ⁓ I'm going to be posting this more on founder value.com. But if you go to get simple route.com, which is the company that owns simple direct, you can learn more about this product, which is free and it helps you decide which path is right for you. but last but not least, you know, I just want to say.
Guys is pretty unreal to me that this post will blow up. think it just means that the sentiment these days about VCs and about the analogy of you have to raise money has completely changed, right? We're no longer in the early 2010s. We're not in 2010s, we're not in 2000s. We are in 2025. We are in AI first world, right? And we don't have to listen to VCs or get their permissions or get other people's permissions. You want to build something for real.
for the first time ever we can hold our destiny into our own hands. And that's exciting part, right? So, you know, if you like the podcast or this video, you want to follow for more, definitely click subscribe button and also, you know, follow me on founder reality.com where I post all my frameworks and new blog posts quite easily. You can also hear, you know, this video and podcast wherever you hear, you know, so you can find me as well on the podcast. Sorry, you can find me as well on Twitter as the George Poo.
And also every week I do post about frameworks and behind the scenes so you do not get anywhere else. So if you're listening, I highly encourage you to sign up for my newsletter, which is free at newsletter.foundryreality.com, which is like weekly. And I send it for free and it's, you know, it gives you new perspectives like this one. I don't share on the pod and I don't share on the blog. So be sure to subscribe to that. So thank you guys for this episode. I hope it helps. And as always, I'll see you next time.