What Do Startup Millionaires Do with Their Money?

The question often arises: What do people do with the millions they earn from selling their startups? The answer varies widely depending on the individual's preferences, financial situation, and goals. Some choose to invest in their legacy while others pursue new business ventures or philanthropic endeavors. Below, we explore various paths taken by those who have made it big through startup sales.

Investment Strategies and Life Choices

For many, the goal extends beyond just accumulating wealth; it's about creating a sustainable legacy that can continue to generate value for future generations. One approach is to invest in training and mentoring young entrepreneurs. By teaching them the principles of investment, entrepreneurship, and risk management, they can inspire the next generation to dream big and take calculated risks. As these individuals grow and develop their own ventures, they may replicate the success stories of their mentors.

Steps Taken by Successful Startup Sells

Identifying New Investment Opportunities

Some choose to reinvest in their obsession or passion. They may find themselves drawn to new startups or businesses that align with their interests. For example, a tech-savvy individual might see an opportunity in a new app or software company, while a culinary enthusiast may start a specialty restaurant or expand into high-end coffee roasting. These individuals often have the capital to take on larger projects, making it easier to turn their ideas into reality.

Joining Investment Groups

Another common path is to join or form investment groups. This allows them to pool their resources and fund promising startups from the seed stage all the way up to later rounds of financing. By investing in a range of companies, these entrepreneurs can diversify their portfolio and increase their chances of financial success. Some may team up with former partners to start a new business, leveraging their existing connections and experiences.

To Vacation or Not

Often, the first step taken by many is to enjoy a well-deserved break. After years of intense focus and hard work, a vacation with loved ones is a natural next step. People might also use this time to reflect on their future goals and decide whether to continue being directly involved in the business world or move on to other pursuits. Whether it's a cross-country trip, a relaxing retreat, or a sunny beach getaway, a break can help restore perspective and energy.

Philanthropy and Social Ventures

For those who prioritize giving back to society, philanthropy is a significant path. Founding a school, starting a non-profit, or investing in community development projects can make a lasting impact. By using their wealth to create tangible and intangible assets, they can inspire others and contribute to the well-being of their communities. This approach not only provides a sense of fulfillment but also helps to perpetuate positive change.

Finding the Next Steps

Once the initial excitement and challenges of the startup phase have subsided, many find themselves exploring new opportunities. Here are some common paths taken by those who have sold their startups:

1. Taking Time Off

Spend quality time with family and loved ones. After years of dedicating themselves to a startup, taking a break to recharge and enjoy personal time is a natural and often rewarding choice. This period can help them reconnect with their loved ones and consider new life goals.

2. Starting a New Company

Many choose to start a new venture, either by themselves or with partners. Leveraging their experience and capital, they can pursue projects that stem from their interests or passions. This might include anything from a tech startup to a creative business.

3. Becoming an Angel or Seed Investor

For those with a penchant for investing, becoming an angel or seed investor can be an attractive option. They can provide seed funding to early-stage startups, helping them grow and succeed. This role allows them to stay involved in the entrepreneurial ecosystem while also generating potential returns.

4. Joining Boards and advisory roles

Many become board members of companies that have secured B or C rounds of funding. This can provide them with valuable experience and connections, as well as potential financial returns. They can also offer their expertise and network to help these companies grow and achieve their goals.

5. Consulting or Operational Support

Dabbling in consulting or operational support for fledgling startups can be a rewarding role. They can help these companies navigate the startup landscape, providing strategic advice and hands-on support. This can be a way to remain active in the industry while also contributing to the growth of new ventures.

6. Becoming a Partner at a VC Firm

For those with experience and connections, becoming a partner at a venture capital firm can be an appealing option. They can leverage their network to invest in promising startups, providing them with the capital and expertise needed to succeed.

7. Starting Their Own VC Fund

Another path is to start a venture capital fund, allowing them to invest in a portfolio of startups. This gives them the ability to make strategic investments and shape the future of emerging industries.

For older individuals (around 50), the decision to change course and enter teaching or start a business related to a long-forsaken hobby is also a viable option. This can be a fulfilling way to transition and leverage their accumulated knowledge and skills.

Each path is unique, shaped by personal preferences and financial situations. Whether through investing in new ventures, philanthropy, or finding new roles in the business world, these individuals continue to make a meaningful impact long after the startup sale is complete.