Leaving his venture-backed startup to go full time on a bootstrapped side hustle: A peek at an indie hacker's finances

Andris Reinman left his position as cofounder and CTO of a venture-backed startup in order to go all-in on his solo project. I've heard of people leaving lucrative employment to take the leap, but leaving your own startup is unusual — especially when the side-hustle is only at $500/mo.

So why'd he do it? It has to do with his finances. Let's take a peek behind the curtain, because that's what we do in this series. 👇

Learning about business from a kid's book

Andris was born in what was then Soviet Estonia, so he says no one around him had a clear understanding of money or business. Instead, he learned from an unlikely source.

💰 "My knowledge of these topics came from a children's book, "Dunno on the Moon." It was about a character from Soviet and prosperous Earth who traveled to a capitalist Moon. Moon people were eventually "saved," but the book still managed to explain different concepts like how the stock market works and so on." —Andris

It was the first book he'd ever read that included anything about business or finance. He said everything was dystopian and distorted, but it covered topics like how to fundraise and get investors, etc. It also briefly covered debt, which had a big impact on Andris — he isn't a fan, though he does have a mortgage and a car loan.

Burning stocks and taking the leap (to the moon)

Like Dunno in the story, Andris took a leap to the metaphorical moon when he decided to go full-time on EmailEngine. And his reasons were unusual.

Andris had a lot of money tied up in tech stocks and in the beginning of 2022, he noticed that they were quickly withering away. Instead of watching his money disappear, he sold them.

At the time, Andris was the cofounder and CTO of a venture-backed martech startup. He'd been a part of it for 4 years, but he didn't feel comfortable in his leadership role and preferred to do everything himself.

Meanwhile, his side-hustle hit a milestone of $500/mo, which he viewed as validation. And that was that. With his product validated and some money that he could use as runway, he quit.

💰 "It seemed to me that instead of investing in public companies, I might as well take that money and invest in my own company. So I sold all my stocks and started paying myself a salary from it." —Andris

EmailEngine doesn't really require him to work on it full-time, so it actually would have made a good long-term side-hustle. But he needed a break.

Importantly, though, Andris says he could only do this because he could afford it. If you can't afford it, his advice is to opt for a side-hustle.

Don't hedge your bets (and be okay with losing)

Going all-in wasn't atypical for Andris. He doesn't hedge his bets. He says it makes him lose focus.

But that approach obviously cost him dearly, as we saw with his undiversified stock portfolio that performed below average in 2022.

At the end of 2021, it was at its peak — roughly $100k. But he ended up with $50k. It was enough to give him a year of runway, and if EmailEngine failed, he could always get a job.

Hitting break-even

Since quitting his startup a little over a year ago, Andris has nearly 10x'd his revenue. But as cool as that sounds, he's still in break-even mode.

Here's what he brings in:

• Revenue: $4,600/mo* (calculated revenue, not MRR)
• Founder take-home pay: $45,000/yr
• Income from "previous commitments": Cannot say for contractual reasons (but less than $45k)
• Personal bank account: $100
• Business bank account: $30,000

He doesn't have much for costs, other than his own pay, so most of what he makes goes to him. Here's what they were last month:

• Total: $4,828 last month
• Founder take-home pay: $3,750
• Hosting fees (homepage, test infrastructure, etc.): $355
• Various business-related stuff (accounting platform fee, etc.): $113
• Co-working space: $359
• Stripe payment fees: $152
• Misc: $99

It's worth noting that his monthly revenue isn't true MRR. He sells license key subscriptions, so he charges yearly and his income goes up and down from month to month, anywhere from $3,500 to $7,000. He uses calculated revenue to pay himself each month, meaning that payments stay the same (until MRR is consistently up). His Stripe account is configured to pay him once a month.

He says it's barely enough to get by, but he hopes to increase it as his revenue increases. And he doesn't have to take money out of what he got from his stocks anymore, which is great.

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Organizing finances with a family of four

As for how he manages his finances, he has a personal account and a family account for his family of four. Both he and his wife transfer money to the family account from their personals, and the family account is used to pay all home and family expenses.

As we saw above, he only keeps about $100 in his personal account. But he keeps a lot in his business account.

Interestingly, the money in his business account isn't the runway that he got from his stock nest egg; it's the revenue that he saved while he was paying himself from the stocks. He essentially paid himself from a separate personal account so that he could keep revenue in his business account where it wouldn't get taxed.

💰 "For accounting and tax reasons, I keep as much as possible on the business account. Estonia has a 0% tax on reinvested profits, so as long as I don't take money out of the company account, I don't have to pay any taxes on it." —Andris

Wise words about seeking investment

Andris has worked with VC funding in the past, but he's bootstrapping EmailEngine. Why? Because he doesn't need funding.

💰 "I'm not against VC money, but there needs to be a reason to take it. If I had a grand plan that would require a lot of money, I'd go meet some VCs. I don't have a grand plan. I just want to slowly grow my business and see where it ends up, so any VC money would not help me at all. VC money is not some simple business loan; it comes with strings attached." —Andris

One piece of advice for indie hackers

His main advice for fellow indie hackers?

💰 "Do not use credit cards to pay for your business unless you are 110% sure." —Andris

He used credit cards for a business once. It failed. Luckily, his limits weren't very high, so he was able to pay it off in a little under a year. But he knows of founders who weren't so lucky — some even had to move to a new country to find pay that could cover their debts.

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You can find Andris on twitter and Github, or check out EmailEngine.

And if you'd like to be featured as a guest in a future interview for this series, let me know in the comments!