This week, I listened to a founder pitch his early-stage start-up. The company raised a few hundred thousand dollars a few years ago. Today it’s out raising another $500k to $750k, which it hopes to complete in the next few months.

The company is growing, but it’s not growing rapidly. So I was curious about what milestones they plan to hit with the capital they’re raising. The company wants to extend its runway by a year or two to give it time to reach breakeven.

When investors put money into a company, they’re looking for a return that’s high enough to justify the risk of capital loss they’re assuming. Their ROI can be through appreciation of the company’s value (i.e., their stake is worth more) or through dividends the company distributes from its free cash flow.

When a company is at breakeven, it’s neither losing money (consuming cash) nor making money (generating cash). It’s covering expenses to keep the lights on. If a company is growing rapidly and is at breakeven, that can be a good situation. Cash generated by the company’s operations is being reinvested in growth initiatives. In theory, if it stopped investing in growth, it would have cash available for dividends or a rainy day. But if the company is at breakeven and not growing, or growing slowly, that means it’s generating just enough cash to maintain itself, with little left for anything else.

Breaking even is a key milestone for a company because it means it’s self-sustaining: totally funded by customer revenue. But if a company is raising capital from investors with breakeven as its goal, it’s important to keep in mind that investors are seeking a return. Breaking even means there won’t be cash to pay dividends to investors, so the investors will be looking for their ownership to be worth more. If the company is breaking even but not growing revenue at a material rate and therefore not increasing its valuation, no clear path to an ROI exists. The likelihood that investors will agree to put money into the company is low.

Any founder raising capital to reach breakeven should consider how they’ll generate a return on the capital they’re seeking from investors and include that info in their pitch.

Today, it hit me that 2025 is almost over. Only four more weeks. It feels like the year flew by. I’ve realized that it’s time to start thinking about 2026. I’m not a fan of setting traditional yearly goals. Because luck and randomness are involved, I can’t control whether I achieve a desired outcome. Instead, I like to focus on habits that, if done consistently throughout the year, materially increase my chances of a positive outcome at the end of the year.

I’ll be thinking about 2026 over the next few weeks and identifying the new habits I want to embrace.

I’ve been curious about the “Great Inflation” period of the 1970s. Reading about decisions in the 1960s and 1970s that led to it was eye-opening. A few months ago, I came across a biographical anthology that caught my eye because it talked about what happened after that period—specifically, how the Great Inflation contributed to the craziness of the 1980s: the junk-bond boom, the leveraged buyout wave, the birth of private equity, and the eventual S&L turmoil.

Dangerous Dreams was interesting because it wasn’t just a biographical anthology that talked about several people in isolation. Rather, it discussed each person’s story and the role they played in the creation and evolution of the junk-bond mania of the 1980s. It was the story of how each person contributed to the broader story and how these players influenced each another.

Louis “The Junkman” Wolfson, Charles Merrill, conglomerate builder James Ling, Michael Milken, Ivan Boesky, T. Boone Pickens, Carl Icahn, Rudy Giuliani, and others were profiled.

The main character, the man who helped birth the junk-bond market, was Michael Milken. The book details his rise and spectacular fall. It does a great job of explaining how an unheard-of book-on-bond analysis sparked Milken’s ideas that led him to build and control the junk-bond market throughout the 1980s.

I learned a lot from this book, especially about how the 1970s created an environment in which the stock market valued blue-chip companies at significantly less than their value and high-growth companies were pretty much shut out of the bond market—all of which led to craziness on Wall Street in the 1980s.

Anyone interested in Michael Milken, T. Boone Pickens, the origins of the junk-bond market, the savings and loans crisis, or how private equity got started should consider reading Dangerous Dreamers. You’ll come away with insights into all the above and more.

A few weeks ago, I was reading a blog post about Costco and its founder, Sol Price. I’m familiar with the discount warehouse retail model because I’ve read biographies about the Home Depot founders, Bernie Marcus, Arthur Blank, and Ken Langone. The post I was reading thoroughly explained not just what Costco’s business model is but also why it’s been so successful. A key thing that stood out to me was how its membership model acted as a filter. It weeded out unprofitable customers and attracted highly profitable, loyal, repeat customers. That really got my wheels turning about my old company, given that it was retail oriented and we never figured out how to consistently attract the type of customer we wanted.

My takeaway is that I should have studied more businesses and industries when I was running my company. Because I didn’t, I tended to follow what others in my industry did—their business models and go-to-market strategies. What I didn’t realize was that there are tons of other models and strategies that people smarter than me had figured out. I could have borrowed from those to create something “innovative” in my industry, which would have given us a competitive advantage and likely increased profitability too.

I was “too busy” to focus on anything but my own business. But what I didn’t realize was that studying other founders and businesses would have made me more aware of the possibilities in business. That increased awareness would have helped me create better solutions, faster, to my business problems. All of which would have benefited my business tremendously.

I now believe that to achieve outsize success in the game of business, you must be a student of the game. ’m not a lifelong student of the game of business, but I’m making up for lost time now.

Current Project: Reading books about entrepreneurs and sharing what I learned from them

Mission: Create a library of wisdom from notable entrepreneurs that current entrepreneurs can leverage to increase their chances of success

Cumulative metrics (since 4/1/24):

• Total books read: 91
• Total blog posts published: 602

This week’s metrics:

• Books read: 1
• Blog posts published: 7

What I completed in the week ending 11/30/25 (link to the previous week’s commitments):

• Read Dangerous Dreamers, a historical narrative about the people, especially Michael Milken, and events that set the stage for the junk-bond boom, LBO wave, and eventual S&L turmoil of the 1980s
• Completed my Thanksgiving challenge (see here)—I’ll share the results in posts this upcoming week

What I’ll do next week:

• Read a biography, autobiography, or framework book

Asks:

• No ask this week

Week two hundred ninety-six was another week of learning. Looking forward to next week!