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Are you VC-funded? No, we're profitable

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Re: Are you VC-funded? No, we're profitable

#11

Post by cthor »

paxys wrote: post #4

VC-funded startups go out of business. Bootstrapped startups go out of business. While there is a large gap in the two models in terms of finances, operations and everything else, trying to argue that customers should pick your company purely because you haven't raised money shows that you are either deliberately being insincere or know nothing about the industry, neither of which are great selling points. If you wan…

It's a signal whether you like it or not. Saying "well shucks anything could go out of business" is meaningless. What partners and customers want to know is the liklihood of that happening. Moreover, going out of business isn't the only risk to consider but also pivoting into another business entirely.

Re: Are you VC-funded? No, we're profitable

#13

Post by altairprime »

light_triad wrote: post #12

It's a bit of a non sequitur: having a profitable business is ideal but if a startup can grow fast with VC money it can be acquired for 40x (Wiz) - 1000x (WhatsApp) revenue even if not profitable

A startup that doesn’t care about making money is a startup that will ignore negative customer feedback if addressing the concerns raised would slow the unicorn’s growing phase. If you’re a stable business, that’s the sort of firm you definitely do not want to hire for key services; the VC involvement is too high an instability to permit. (Advertising is not a key service.)

Re: Are you VC-funded? No, we're profitable

#14

Post by epolanski »

light_triad wrote: post #12

It's a bit of a non sequitur: having a profitable business is ideal but if a startup can grow fast with VC money it can be acquired for 40x (Wiz) - 1000x (WhatsApp) revenue even if not profitable

Why does it always have to be about maximizing exits at all costs?

There's people that simply enjoy their company and working in it, they only luck to sell when they are old and there are no great heirs to the business.

And that's true for billion dollar companies too.

Re: Are you VC-funded? No, we're profitable

#15

Post by mmaunder »

light_triad wrote: post #12

It's a bit of a non sequitur: having a profitable business is ideal but if a startup can grow fast with VC money it can be acquired for 40x (Wiz) - 1000x (WhatsApp) revenue even if not profitable

VCs are diversified. Founders are not. Their math checks. Yours does not.

Re: Are you VC-funded? No, we're profitable

#16

Post by nothercastle »

light_triad wrote: post #12

It's a bit of a non sequitur: having a profitable business is ideal but if a startup can grow fast with VC money it can be acquired for 40x (Wiz) - 1000x (WhatsApp) revenue even if not profitable

Can but most will die trying. The customer will get screwed either way. The VC sees growth or die, the customer gets die or suck. Loose lose for the customer

Re: Are you VC-funded? No, we're profitable

#17

Post by soup10 »

epolanski wrote: post #14
light_triad wrote: post #12

It's a bit of a non sequitur: having a profitable business is ideal but if a startup can grow fast with VC money it can be acquired for 40x (Wiz) - 1000x (WhatsApp) revenue even if not profitable

Why does it always have to be about maximizing exits at all costs? There's people that simply enjoy their company and working in it, they only luck to sell when they are old and there are no great heirs to the business. And that's true for billion dollar companies too.

many businesses are boring or a grind by their nature and would not exist without financial incentive and an exit plan

Re: Are you VC-funded? No, we're profitable

#18

Post by tmpz22 »

epolanski wrote: post #14
light_triad wrote: post #12

It's a bit of a non sequitur: having a profitable business is ideal but if a startup can grow fast with VC money it can be acquired for 40x (Wiz) - 1000x (WhatsApp) revenue even if not profitable

Why does it always have to be about maximizing exits at all costs? There's people that simply enjoy their company and working in it, they only luck to sell when they are old and there are no great heirs to the business. And that's true for billion dollar companies too.

Bootstrap = chance of failure, more work because you can't hire a team to do significant amount of work for you

VC-funded = Full Salary early, network for future jobs if company fails, shortcuts like joining an incubator and selling to your cohort for early sales figures (which can then be used to get more money)

Re: Are you VC-funded? No, we're profitable

#19

Post by plorkyeran »

recursive wrote: post #10
paxys wrote: post #4

VC-funded startups go out of business. Bootstrapped startups go out of business. While there is a large gap in the two models in terms of finances, operations and everything else, trying to argue that customers should pick your company purely because you haven't raised money shows that you are either deliberately being insincere or know nothing about the industry, neither of which are great selling points. If you wan…

As a customer, I might be interested to know if a vendor can continue to exist if they achieve only moderate success.

Yeah, if a non-VC-funded vendor is making a small profit while paying everyone's salaries they're pretty likely to still be around in a few years. A VC funded vendor that's making a small profit but not growing won't be.

Re: Are you VC-funded? No, we're profitable

#20

Post by bigstrat2003 »

jascination wrote: post #5

It's a cute quote, but it seems about 5 years out of date. There was a golden period for a while there that indie hackers and self-funded devs could create a useful product and grow it themselves and could 'beat' VCs. But now you can create some AI generated slop in a day that used to take months. Being an indie hacker used to be a sort of badge of honour, now it's where everyone starts. I think the VC-backed compani…

> But now you can create some AI generated slop in a day that used to take months.

Yeah, but it won't work. Not a very good look if you're trying to grow your business.

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