[auganov]

Assembling a team is tougher for a lifestyle business. A startup lottery ticket is more desirable. "Build this with me so we might get rich" is better than "build this with me so we might pay ourselves large salaries".

Then you've got the current funding climate that absolutely loves companies that look like lifestyle businesses. The temptation to take money is going to be huge.

Also - a failed VC-backed startup looks better resume-wise.

[vram22]

>Then you've got the current funding climate that absolutely loves companies that look like lifestyle businesses.

Can you elaborate on this? I do keep some track of the startup world (since I consult to them) but was not aware of this point.

>Also - a failed VC-backed startup looks better resume-wise.

Why? Genuine question. Why would a failed small business not look as good?

[auganov]

My impression of the current seed and pre-seed enviorment is traction trumps everything. Revenue being the favourite sign of traction. A lifestyle business usually tries to establish revenue very early on. Another aspect worth mentioning, though perhaps a minority opinion - the Internet economy has grown enough to make what traditionally would be a simple niche'y product into 9 figure phenomena. The point being, VCs aren't complete fools putting money into these at an early stage.

VC funding is a form of social proof. Also in case of a total failure, as in 0 traction, perhaps even no product - it establishes "realness" of sorts.

[vram22]

Got it now, thanks. Interesting.