On January 31, 2018, software developer Kevin Wellsmen sat in his office wondering which path to take his lifestyle company down. Wellsmen had developed a service as a software (SaaS) platform for a program that turns data into actionable insights for restaurants. Wellsmen’s company, Diner Data, was doing well. Although it was profitable and afforded him a comfortable lifestyle, Wellsmen was aware that Diner Data’s path had hit a dead-end—its organizational structure was limiting its growth. He had an offer from a venture capital investor that could help the company scale to a USD 50 million-plus valuation. However, Wellsmen would have to endure significant lifestyle costs if he chose that route, in addition to having to give up a relatively large portion of the company. Thus, Wellsmen faced a dilemma: whether to maintain the company as it was or to bring in venture capital investment to scale the company.
This case highlights the issues that entrepreneurs face in deciding between pursuing a lifestyle business or a scalable venture.