You Don’t Need To SELL Your Company To Make A LOT of Money, You Need To Do This! Ft. Dave Whorton
Here are the top 10 key takeaways from Ed Mylett's conversation with Dave Whorton about building evergreen companies that last for decades without requiring an exit strategy.
1. The venture capital path has extremely low success rates
The current Silicon Valley model of raising venture capital and building companies for quick exits has fundamentally broken success metrics. Between 50-60% of venture-funded companies fail completely, resulting in total losses for investors, founders, and teams. Only 1-2% of venture-backed companies become the success stories you read about in magazines.
This narrow definition of business success has created a system where thousands of companies chase a model with terrible odds. Some argue that only 10-12 companies per year actually matter in the entire venture ecosystem. The pressure to raise money quickly and scale rapidly often masks underlying problems rather than solving them.
2. Modern funding levels are completely out of proportion to historical norms
The scale of venture funding has reached absurd levels compared to what built the most successful companies in history. In the first 40 years of the venture capital industry through 1999, only $25 billion total was deployed across all companies including Google, Amazon, Electronic Arts, Starbucks, and FedEx. Uber alone raised $25 billion, demonstrating how disconnected current funding has become from actual needs.
Apple, Google, Microsoft, and Amazon combined raised less than $25 million in venture capital as a percentage of their eventual market caps. These trillion-dollar companies were built on minimal external funding, proving that excessive capital isn't necessary for building massive, lasting businesses.
3. Evergreen companies follow seven core principles
Successful long-term companies operate on seven interconnected principles that form a complete system. Purpose comes first - having a deep, meaningful mission beyond just making money. Perseverance follows, as these companies must weather economic downturns, wars, and market changes over decades.
People-first culture ensures that treating employees well creates a cascade effect where they take care of customers, suppliers, and communities. Profit becomes critical validation of customer value rather than something to avoid. Companies remain private forever to maintain long-term planning horizons without public market pressures.
Paced growth maintains sustainable rates between 8-25% annually, avoiding the cash flow, culture, or management bandwidth problems that come with hypergrowth. Pragmatic innovation ensures continuous adaptation through capital-efficient R&D, following the "bullets before cannonballs" approach of testing small before scaling big.
4. Debt is the fastest way to lose your company
Traditional business school teachings about optimizing capital structure through debt are dangerous for long-term company building. Evergreen companies maintain extremely low or zero debt levels because debt creates the primary mechanism through which founders lose control of their businesses.
While academic theory suggests using debt for tax benefits and leveraging returns, practical experience shows that debt puts companies at risk during inevitable downturns. Market cycles, recessions, and unexpected challenges become existential threats when companies carry significant debt burdens rather than manageable obstacles for debt-free businesses.
5. Compound growth over decades creates massive value
The magic of evergreen companies lies in sustained compound growth over long time periods rather than explosive short-term scaling. A company growing at 15% annually - which would be considered "living dead" in Silicon Valley - becomes 67 times larger over 30 years. This means a $10 million company becomes $670 million, or a $100 million company reaches $6.7 billion in actual revenue.
This patient approach allows companies like Enterprise Rental Car, Edward Jones, and other evergreen businesses to build substantial scale through consistent execution. Warren Buffett and Einstein both recognized compounding as one of the most powerful forces in business, yet the current startup culture completely ignores this mathematical reality in favor of unsustainable growth spurts.
6. Introversion tends to correlate with evergreen leadership
Successful evergreen founders typically lean toward introversion rather than the extroverted personalities common in Silicon Valley. About 80% of evergreen leaders identify as introverts in informal surveys. These leaders have strong internal compasses and don't require external validation from media coverage, investor praise, or public recognition.
Introverted leaders find satisfaction in employee happiness, customer testimonials, and building something meaningful rather than seeking spotlight attention. They don't need to be on magazine covers or featured at high-profile events to feel successful. This internal validation system proves crucial for the decades-long journey of building lasting companies.
7. Training and development become competitive advantages
Evergreen companies invest heavily in employee training and development at levels far exceeding venture-backed startups. One example company, McCarthy (a general contractor), has their CEO spend 30% of his work year training employees, particularly focusing on first-line managers who directly oversee most workers.
This commitment to development creates a fundamentally different employee-employer relationship. Companies invest deeply in people with the understanding that employees will commit their careers to the organization. The relationship becomes mutually beneficial rather than transactional, with employees staying an average of 15 years compared to the short lifespans of most startups.
The broken relationship between employers and employees in modern business stems from companies no longer investing in training due to fear of people leaving for higher pay elsewhere. Evergreen companies solve this by creating environments where the grass truly is greener, making external opportunities less attractive.
8. Building evergreen doesn't mean building small
A common misconception about evergreen companies is that they remain small due to slower growth rates. However, these companies can become extremely large over multi-decade timeframes. The key difference is building billion-dollar revenues rather than billion-dollar valuations.
Starting slow allows companies to build strong foundations in culture, product development, customer service, and sales processes. This solid groundwork actually enables accelerating growth over time as companies strengthen their teams, expand product portfolios, and enter new geographies. A 30-year-old founder with deep purpose can build something massive by age 60 through this patient approach.
The slower initial pace provides breathing room for founders to learn and adapt, taking on learning journeys that would be impossible under venture capital time pressures. This approach builds more sustainable competitive advantages than rushing to scale before fundamentals are solid.
9. You don't need to sell something for it to have value
One of the biggest misconceptions in entrepreneurship is that companies must be sold to create value for founders. Building a business creates a tremendous asset regardless of exit plans. Just as wealthy individuals don't sell their homes to recognize their value, business owners can maintain ownership while building substantial net worth.
A company that might sell for $20 million after seven years could generate more than $20 million annually if grown at 15% for another 20 years. This ongoing cash generation often exceeds the one-time payment from selling, while maintaining ownership control and the ability to pass the business to future generations or philanthropic causes.
The obsession with exits prevents entrepreneurs from seeing the wealth-building potential of ownership itself. Keeping successful businesses allows founders to write substantial checks for community needs like hospital wings or other charitable causes, creating lasting positive impact beyond personal wealth.
10. Purpose-driven companies outperform over time
Companies built around deep purpose consistently outperform those focused primarily on wealth generation. Founders motivated by changing the world, building remarkable organizations, or making meaningful dents in the universe create more value than those chasing social status through wealth.
Purpose-driven companies attract better talent, create stronger customer relationships, and build more resilient cultures. When people understand and connect with a company's mission beyond profit, they contribute more creatively and stay longer. This alignment between personal values and company mission becomes a sustainable competitive advantage.
The seeming tradeoff between purpose and profit proves false over longer time horizons. Purpose-driven companies often achieve higher profitability through lower turnover, reduced recruiting costs, stronger customer loyalty, and more innovative problem-solving from engaged employees who feel connected to something meaningful.