Lifestyle business doesn't mean what you think it means. Supports a persons or family lifestyle (i.e. you need a place to live, food, essentials, and could be more than just that...), rather than being for investors to make equity growth.
That definition is still horrible. Plenty of investors interested in buying equity in a franchise or retail shops. What that has to do with "lifestyle"?
No. The definitions of these are clear. It's pretty easy to define what is a franchise and what is a retail shop.
The problem is with this definition of "lifestyle business". What is the cutoff? What does it mean to "support a lifestyle?" If a company makes 10M/year and it is growing at a healthy pace without VC capital, is it "lifestyle"?
If someone makes a living of investing in fast food franchises, each shop by itself taking 500k of initial investment and then returning $100k/year in profit, do you count each individual franchise as a "lifestyle" business or the whole thing as an "equity investment"?
Like others said already (and maybe that is the point of TFA), this definition of "lifestyle business" seems to serve only as a way for VCs to downplay the significance and importance of so many businesses that exist in every sector.
Clear and broad at the same time. A Times Square McDonalds store and a country town uniform shop fall under this umbrella.
Cut off is “would an investor buy equity for growth”.
Some people own say 5 mcdonalds franchises: the owning business might be a growth one if they are planning to expand. Might be lifestyle if they don’t. Dynamics
matter as much as a static snapshot view.
Might be a middle ground but I think it is small. Coops for example.
