How I Screwed Up My Early Retirement

Don't miss it!

  Don’t miss it!

Opportunities in life are like a train in an impoverished country.  You better get on it whenever you see one going in the direction you want. Otherwise, you don’t know when the next one will come!

This post is a confession of my screw up where I passed on a rare chance to retire early….real early.  Read this tale and avoid the mistake I made, so you can catch the express train to early retirement.  Otherwise, you never know if it will stop by your station again.

Charles Dickens would’ve started this tale with “It was the best of times and it was the worst of times”.  And he would’ve been right.

It was early 1998.  The heady days of the dotcom boom.  The story began in a city called Pittsburgh, far away from the ‘happening’ spots in Silicon Valley or the high finance of New York and Boston.  In the interests of protecting the identity of all involved, I will not use names but the story is true.

One of my friends introduced me to an entrepreneur at a party we all went to. Over beer and appetizers, we were talking about jobs, women, Internet and, as every conversation in Pittsburgh eventually turns to, the Steelers.  This entrepreneur had recently graduated in computer science, and his high school buddy who also graduated in computer science from another university, had jointly started a company, based on their proprietary software for data analysis they developed during their final year of college.  This was long before the words ‘big data‘ were even coined.

A beautiful setting for an ugly screw-up.

  A beautiful setting for an ugly screw-up.

This 2-person company wanted a CEO who could help them put together a business plan, pitch it to venture capitalists and build a team, while they focused on building their solution.  They didn’t have any money to pay me. Being the naive guy that I was, I agreed to help these guys on a part-time basis since I had a demanding full time job already.  A part of me wanted to get this ‘learning experience’ with startups without actually leaving my secure job.  I studied their proprietary solution, did market research, analyzed competition (hardly any for their innovative solution), developed a customer value proposition, pricing strategy, and put together a business plan with detailed P&L projections and a crisp pitch presentation for VCs.  

I spent several nights and weekends putting all this together while ensuring I didn’t slack in my day job.   This side hustle – if I can even call it that – was consuming 25-30 hours a week, in addition to my full time job. We also did road shows with a couple of VCs, but luckily, we didn’t have to do much more.  Two VCs we approached loved the plan, and the company raised $450,000 fairly quickly.

Here’s the stupid decision I made.  I did not feel confident about leaving my job and joining these guys.  My probabilistic attitude for risk had not developed well at that time.  I felt like I played my role as I promised and got them positive results.  I decided to stay put in my job and part as friends with the entrepreneurs.  I compounded the mistake by not accepting any equity but when they sent me a $9,000 ‘friendship’ payment, I was moved by their goodwill gesture.   This was accompanied by a nice Thank You note.  

Even though there was no written agreement between us, they said they figured I should get 2% of the money I helped them raise.  I promptly returned back the money saying every dollar is critical for a startup, and it was as much a learning experience for me and I had fun helping them out so I didn’t feel right about taking the money.  Talk about being naive.  

After this episode, I went on with my work, and left abroad for a one year stint in an interesting role with my company.  The startup also moved on, of course, and found a new CEO, who was given a sizable equity stake in the company.

Why do you need the Four Secrets!

You made out good, buddy.  Wish I had come along for the ride 🙁

Fast forward almost 2 years.  The company had 40 employees by end of 1999 and had opened up three offices across the country and the founders were debating between Frankfurt or London to open their first ever European office.

Around this time, the company got an offer from a large software company, and were soon snapped up in January 2000 for over $40 million!  They weren’t making any profits then but their solution was apparently a ‘must-have’ for this mega-company acquirer.   Of course, the bottom fell out of the technology market later that year but the timing for these guys could not have been more perfect.  The entrepreneurs made out very well, as expected, and the CEO they hired? He walked away with a cool $3.6 million after just 1.5 years on the job!  

Why didn't you force me to take the blue pill?

Why didn’t you force me to take the blue pill?

Regrettably, I had taken the red pill.  Nearly 15 years later, I emerge as a blogger with a strange nom de plume, mentioning the coincidental $3.6 million target figure ($10!).  Fate, it seems, is not without a sense of irony.  I had to channel Morpheus there to come to terms with my disappointment.  

Folks, learn from this sorry tale. Grab a seat on that train whenever you see it, for this train may not come by your station again.

PS:  I know this experience doesn’t change the odds of entrepreneurship success.  But it still pains me to think how I missed cashing in on the biggest tech boom over the last 50 years. 😢

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12 comments on “How I Screwed Up My Early Retirement”

  1. By Aaron C.

    Hi I’m in the same position you were in all those years ago. Hopefully, I can stand on the shoulders of giants like you and not make the same mistakes. Thanks for writing!

  2. By ESI Money


    I did take the start-up option and the company was bankrupt a year later. Thankfully I moved to a sister company without missing a beat.

    There’s much greater chance of my outcome than hitting it big, so don’t kick yourself too hard.

    • By TFRadmin

      Thanks ESI. Ain’t easy to have the pot of gold within reach and to lose it!

  3. By ZJ Thorne

    I like that this story includes you having really high integrity throughout the process. You felt you were given a fair-deal and you worked hard. You wanted your friends to succeed and did not want to take advantage as they jumped off the cliff; you could not know that their parachutes were golden and properly packed.

    • By TFR

      Thanks for the nice words, ZJ. As they say, you can’t take it with you. So, no regrets but it does sting occasionally when I think about it.

  4. By ambertree


    As I recently joined a startup, I hope in hindsight it was the right thing to do. As pointed out, you never know upfront what startup will make it and what startup will fail.

    To be honest, I doubted a lot and sometimes still do.

  5. By ann

    Then there is my aunt who took stock in a “can’t miss, make a million start-up,” instead of pay. She still has the stock in a defunct company, that had a super idea, but no one else saw it. 5 years after they dissolved someone else had the same great idea at the right time and made a fortune. Don’t worry about my aunt, she has more than plenty of money, but it wasn’t because of that stock.

  6. By TFR

    Thank you Mr. Tako, GS, FTF and ERN!

    I agree hindsight is 20-20. It’s a strange thing this human nature. It makes the hindsight mistakes appear worse than they are because you now have the full benefit of what transpired since then. You are right that the start-up could’ve folded and I would’ve kicked myself for leaving a secure job. Anyway, with the full benefit of hindsight, I think I can call this a screw-up. It would have been a different story had the company folded – I may have written this article patting myself on the back! In either case, a huge element of luck is involved. But it still stings to think about what could’ve been! Thanks for your comments.

  7. By earlyretirementnow

    Wow, thanks for sharing that story. If there is any consolation, not winning the jackpot is still better than losing big time. Example: I had a few opportunities to join smaller companies (usually hedge funds). I declined them all. Some of the firms worked out all right, some are wildly successful now and some have folded. I had no idea which one will be the winner and which one will be the stinker. I am happy I stayed with my company. It will take a bit longer to reach FIRE, but I will eventually reach it. If I had worked for the fund that eventually folded I would have had a hard time getting back into the business again. Not worth the risk. Especially not as a sole breadwinner with a wife and kid.

  8. By Full Time Finance

    Hindsight is 20-20. The ones that got away tend to dog us more then they should. That being said the choice you did make may have netted you other things in life worth more then the money if you sit there and think about it. It could even be that your making that choice led you to creating this blog. In theory your blog could educate one person out of debt that maybe ends up curing cancer after no longer worrying about money. Far fetched, but you never know. Cool and entertaining story.

  9. By The Green Swan

    Oh man that’s rough! It’s always hard to question past decisions… They may be regrettable but I wouldn’t go so far as to call it a mistake. You made the best decision based on the information at hand at that time. Plus you got some great karma from it! What a story, thanks for sharing.

  10. By Mr. Tako @ Mr. Tako Escapes

    Hindsight. You can’t kick yourself over lost opportunities. We all make the best decisions we can at the time.

    Long ago I took one of those tech startup opportunities, and it didn’t pan out.

    Oh well, I found my fortune other ways.

Comments are closed.