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Ask HN: Is it okay to just bootstrap it, even when VCs are knocking?

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Re: Ask HN: Is it okay to just bootstrap it, even when VCs are knocking?

#71

Post by cm277 »

I've done both. Bootstrapped a business to >$10m and (now) running a VC-backed firm. The models are different because the markets the two companies operate in are different. I see VC money as getting steroids in a competitive sport (not speaking from experience on that one...): it will save time, it will probably affect your health, but if you are indeed competing in sport, and other competitors are doing it, you don't have much choice.

So, I would advise you to look around you: what is your market? is it that highly competitive? can you still be in that market without competing (e.g. a highly fragmented market)? do you want to compete and can you avoid it?

Also keep this in mind: a VC-firm is meant to exit, if not immediately, then eventually. But, a bootstrapped firm also has to exit at some point too: you'll either have to sell it (maybe at a loss), shut it down, or pass it down (death comes for us all). Are you willing to do any of these? that's part of the answer to "do you want to compete?" above...

Re: Ask HN: Is it okay to just bootstrap it, even when VCs are knocking?

#72

Post by jimnotgym »

buf wrote: post #24

I'm a solo dev doing $700k yearly across two saas products. I'm also the founding engineer at Reforge (e.g. I've done the VC game from A16Z). There are two things I look at when raising VC. 1. What's the TAM of my product and will a capital injection get me there faster? 2. Do I actually want to raise capital or do I want to work at my own pace? The last couple of years (after Reforge), I've just been working at my o…

Point 2 is very important. Do you even need more capital? What would you do with it if you had it? If you are sat there frustrated that your product could be a game changer with just a few million dollars more capital then VC's are worth considering. If you don't need the capital then why share equity!

Re: Ask HN: Is it okay to just bootstrap it, even when VCs are knocking?

#74

Post by 12tvende »

Sorry for the dumb question, maybe this is just my english skills falling short: What does MMR mean?

And to answer the question even though I have no experience being in a such a position nor running a business: I would probably keep running it myself as long as it gives meaning and is driven by your passion

Re: Ask HN: Is it okay to just bootstrap it, even when VCs are knocking?

#75

Post by tjomk »

mik3y wrote: post #25
gkanai wrote: post #10

Building a bootstrapped business (i.e. NOT taking venture capital) is a rare skill. I would keep on building without outside capital if you can continue to build growth. If you hit a ceiling (without growth) then you may want to consider looking for/accepting outside capital. As soon as you accept VC funding, there are basically 3 outcomes for your company. Getting acquired, going public (if that's an option where yo…

Good advice here. > If you hit a ceiling (without growth) then you may want to consider looking for/accepting outside capital. One other option at this point is to sell the whole business. For bootstrappers allergic to VC or lacking the drive/skill to scale further/faster, can be a nice outcome. Seems to be a growing number of firms specializing in small saas acquisitions too (Tiny Capital comes to mind - no affiliat…

Growth is not everything. I remember reading "Let my people go surfing" by the Patagonia founder where he mentioned multiple times that they were trying to artificially limit their growth by raising the prices for their products. You don't need to chace ever higher profits. Staying small and enjoying your life is also an option.

Re: Ask HN: Is it okay to just bootstrap it, even when VCs are knocking?

#76

Post by tlb »

Either path can be right for different people. And the wrong decision can be horrible.

You can always take VC later, but you can’t un-take it. So you should be pretty sure that you want to spend the next 10 years of your life shooting for a billion dollar company. Otherwise, stay the course.

Taking seed funding (such as from YC) is not as big a risk as VC funding. Seed-funded companies often don’t go on to take VC, and while seed funders will encourage you to go for the big time, they won’t have the board fire you from your own company like a VC would if they think you’re under-delivering.

Re: Ask HN: Is it okay to just bootstrap it, even when VCs are knocking?

#78

Post by spaceman_2020 »

teh_klev wrote: post #62
spaceman_2020 wrote: post #20

I can tell from your post that you will absolutely hate ceding control to a VC I would recommend finding a co-founder who has similar ideals but can handle the parts you don’t like doing, and has business experience. You’ll get much further without losing real control

> I would recommend finding a co-founder who has similar ideals but can handle the parts you don’t like doing, and has business experience Why does this need to be a co-founder? You can hire people as employees to do the daily "business" grunt work.

You want someone with skin in the game. A partner also helps in bouncing off ideas, figuring out a grander strategy, and in general, being support you can rely on.

Unless OP wants a quick exit, this is a decade long journey. Having friends and partners along the way helps.

Re: Ask HN: Is it okay to just bootstrap it, even when VCs are knocking?

#79

Post by bitL »

mik3y wrote: post #25
gkanai wrote: post #10

Building a bootstrapped business (i.e. NOT taking venture capital) is a rare skill. I would keep on building without outside capital if you can continue to build growth. If you hit a ceiling (without growth) then you may want to consider looking for/accepting outside capital. As soon as you accept VC funding, there are basically 3 outcomes for your company. Getting acquired, going public (if that's an option where yo…

Good advice here. > If you hit a ceiling (without growth) then you may want to consider looking for/accepting outside capital. One other option at this point is to sell the whole business. For bootstrappers allergic to VC or lacking the drive/skill to scale further/faster, can be a nice outcome. Seems to be a growing number of firms specializing in small saas acquisitions too (Tiny Capital comes to mind - no affiliat…

> One other option at this point is to sell the whole business.

There are many weird companies preying on tired execs with small-to-medium businesses that hit a plateau. Typically those businesses are gutted slowly over a few years after the acquisition so that they bring x times the purchase price ("undertakers of software industry" like CA or ESW etc.).

Re: Ask HN: Is it okay to just bootstrap it, even when VCs are knocking?

#80

Post by argiopetech »

conanbatt wrote: post #60
gkanai wrote: post #10

Building a bootstrapped business (i.e. NOT taking venture capital) is a rare skill. I would keep on building without outside capital if you can continue to build growth. If you hit a ceiling (without growth) then you may want to consider looking for/accepting outside capital. As soon as you accept VC funding, there are basically 3 outcomes for your company. Getting acquired, going public (if that's an option where yo…

> Building a bootstrapped business (i.e. NOT taking venture capital) is a rare skill. It is VC companies that are rare - the vast majority of businesses of any kind - and also internet businesses - are bootstrapped.

VC-backed businesses being more rare than bootstrapped ones does not reduce the rarity of a successful bootstrapped business or the skill needed to create one.

To your parent's point, it is likely a rarer skill to successfully bootstrap businesses than to take venture capital. The difference is opportunity. A plumber in Oklahoma can bootstrap a successful plumbing business, but wouldn't be likely to get venture capital for such a business.

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