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Meaningful exits for founders (2016)

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Re: Meaningful exits for founders (2016)

#11

Post by clark-kent »

ilrwbwrkhv wrote: post #6

It's crazy that a series d exit would net a founder 7 million and yet my bootstrapped business returned a 4 million profit for me last tax year. I think people need to learn more about how to scale a bootstrapped business. Even when I was getting started, I read a ton on VC funded businesses but not a lot on non VC funded businesses. I think there is tremendous amount of money to be made in bootstrapping as well. I t…

Thats impressive. Do you mind sharing some tips that helped you scale your bootstrapped business to 4million profit?

Re: Meaningful exits for founders (2016)

#12

Post by yesimahuman »

bsuvc wrote: post #8

TLDR: dilution is a thing and investor incentives are not always aligned with founder, when it comes to early exit opportunities. --- But... I don't think there are really a lot of opportunities to exit at $38m in the early stages of a startup, even if your valuation says it is possible on paper. There just isn't much of a market for companies at that stage of growth. Imo, the more likely scenario is for a startup to…

The second case isn't probably good for founders either. I don't think it would be easy to convince investors to let you take cash out of the business to any meaningful degree, but I suppose that depends on how much control you have over the business at that point.

Re: Meaningful exits for founders (2016)

#13

Post by hodgesrm »

ilrwbwrkhv wrote: post #6

It's crazy that a series d exit would net a founder 7 million and yet my bootstrapped business returned a 4 million profit for me last tax year. I think people need to learn more about how to scale a bootstrapped business. Even when I was getting started, I read a ton on VC funded businesses but not a lot on non VC funded businesses. I think there is tremendous amount of money to be made in bootstrapping as well. I t…

This. In addition to better outcomes for founders it can be a better outcome for the economy at large including but not limited to customers and employees. As a whole society would be better off with fewer Ubers & WeWorks.

Re: Meaningful exits for founders (2016)

#14

Post by bitcurious »

ilrwbwrkhv wrote: post #6

It's crazy that a series d exit would net a founder 7 million and yet my bootstrapped business returned a 4 million profit for me last tax year. I think people need to learn more about how to scale a bootstrapped business. Even when I was getting started, I read a ton on VC funded businesses but not a lot on non VC funded businesses. I think there is tremendous amount of money to be made in bootstrapping as well. I t…

Would love to have you write about it. Seems like you have both the experience and the appreciation.

Re: Meaningful exits for founders (2016)

#17

Post by tptacek »

ilrwbwrkhv wrote: post #6

It's crazy that a series d exit would net a founder 7 million and yet my bootstrapped business returned a 4 million profit for me last tax year. I think people need to learn more about how to scale a bootstrapped business. Even when I was getting started, I read a ton on VC funded businesses but not a lot on non VC funded businesses. I think there is tremendous amount of money to be made in bootstrapping as well. I t…

It is straightforward to get a body-shop consulting business to mid-7-figures.

In an acquisition of that business, you're going to get a very low multiple on your forward revenue. That's because, in general, you can't plug a body-shop consultancy into a bigger sales machine and amplify the profits; sales and delivery in those businesses are delicately balanced, and while they can be scaled, they can't be abruptly scaled by an acquirer.†

If you can bootstrap a product business, none of that caveat applies. You should bootstrap if you can!

† (but if your consultancy is throwing up 7 figure profits, you might not care about its sale value; just run the company for 10 years and bank the profits).

Re: Meaningful exits for founders (2016)

#19

Post by cj »

clark-kent wrote: post #11
ilrwbwrkhv wrote: post #6

It's crazy that a series d exit would net a founder 7 million and yet my bootstrapped business returned a 4 million profit for me last tax year. I think people need to learn more about how to scale a bootstrapped business. Even when I was getting started, I read a ton on VC funded businesses but not a lot on non VC funded businesses. I think there is tremendous amount of money to be made in bootstrapping as well. I t…

Thats impressive. Do you mind sharing some tips that helped you scale your bootstrapped business to 4million profit?

(Not the original poster but have a similar background).

#1 advice for engineer-founders is to always be questioning whether coding is the best leveraged use of your time.

As a bootstrapped engineer founder, I spent way too many months (years?) coding non-stop, even after we got past PMF, despite having the revenue to hire engineers to replace me day-to-day. These days I do zero coding, and am still equally happy and fulfilled. At least for me, spending days coding was a really easy way to feel productive, but it wasn't the best use of time compared to hiring, marketing, sales, company culture, etc.

#2 advice for founder-engineers: after you're able to stop coding, remember that your product is worthless if no one knows about it or if no one is using it. Once you get product market fit into a good place and have revenue traction, it's time to spend your nights thinking about marketing and sales rather than code.

TLDR: always make sure you're spending your time in the most highly leveraged areas. Hiring and delegating. Coding is rarely the highest leveraged area your time can be spent.

Re: Meaningful exits for founders (2016)

#20

Post by [deleted] »

ilrwbwrkhv wrote: post #6

It's crazy that a series d exit would net a founder 7 million and yet my bootstrapped business returned a 4 million profit for me last tax year. I think people need to learn more about how to scale a bootstrapped business. Even when I was getting started, I read a ton on VC funded businesses but not a lot on non VC funded businesses. I think there is tremendous amount of money to be made in bootstrapping as well. I t…

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