Congrats, Kevin and Pierre on the success. You've all been such an inspiration and model for us in the TinySeed community.
How we bootstrapped our SaaS to $1M ARR
41–50 of 159 posts
Re: How we bootstrapped our SaaS to $1M ARR
#42Congratulations! But maybe "bootstrapped" is not a 100% correct. > MAY 2020 - Joining Tinyseed > And this is precisely why we never decided to raise money. However, a few years ago, [...] An accelerator designed precisely to help people grow their business [...] The money and the support we got from the program helped us grow ScrapingBee into what it is now
Co-founder here, I was waiting for this comment to be honest. So in essence, if you consider that bootstrapping is building a business without external funding, you're correct. But to me, bootstrapping VS "VC road" is much more nuanced than this. Going the VC road forces you to have crazy growth and raise more round because the VC model only works if they fund unicorn 1 time out of 100(0). TinySeed works even if they…
>But to me, bootstrapping VS "VC road" is much more nuanced than this.
I went to the "TinySeed.com" website landing page and I do see that they prominently advertise "The First Accelerator Designed for SaaS Bootstrappers".
And then their FAQ page has these example financial terms:
>TinySeed invests $120k for the first founder, $60k for the second, and $40k for the third. Our standard terms are for 10-12% equity. -- from https://tinyseed.com/program#program-faq
Well, if founders accept those terms, they are no longer "bootstrapping" as people generally understand that word. Yes, you may have been bootstrapping right up to the point _before_ taking TinySeed $180k but after that outside capital infusion, "bootstrapping" literally no longer applies. It doesn't seem like any nuance is necessary. It's quite a binary status.
Re: How we bootstrapped our SaaS to $1M ARR
#43Congratulations! But maybe "bootstrapped" is not a 100% correct. > MAY 2020 - Joining Tinyseed > And this is precisely why we never decided to raise money. However, a few years ago, [...] An accelerator designed precisely to help people grow their business [...] The money and the support we got from the program helped us grow ScrapingBee into what it is now
Co-founder here, I was waiting for this comment to be honest. So in essence, if you consider that bootstrapping is building a business without external funding, you're correct. But to me, bootstrapping VS "VC road" is much more nuanced than this. Going the VC road forces you to have crazy growth and raise more round because the VC model only works if they fund unicorn 1 time out of 100(0). TinySeed works even if they…
To me, it's really important that the tech community define "bootstrapping" as no more and no less than "having a plan to reach profitability with total investment on the order of what a [not-outrageously-wealthy] group of founders might invest," and to frame it as a good thing.
With TinySeed's round at "$120k for the first founder, $60k for the second, and $40k for the third" (https://tinyseed.com/program#program-faq) this is very much along those lines.
If one further gatekeeps the label with "but the founders need to invest this personally or it doesn't count..." that restricts the label to a very small segment of privileged individuals. And in a world where there's a (false) narrative of a "bootstrapped or VC backed" binary, that gatekeeping reinforces the notion that less privileged founders have no choice but to go the VC route or do nothing at all. I would hazard a guess that great ideas and great societal impacts have been lost as a result of this framing.
Re: How we bootstrapped our SaaS to $1M ARR
#44Earlier quoted context omitted.
Co-founder here, I was waiting for this comment to be honest. So in essence, if you consider that bootstrapping is building a business without external funding, you're correct. But to me, bootstrapping VS "VC road" is much more nuanced than this. Going the VC road forces you to have crazy growth and raise more round because the VC model only works if they fund unicorn 1 time out of 100(0). TinySeed works even if they…
@Daolf - congrats on the building, definitely NOT easy to do. What growth metrics did Tiny look at? Did the investment come at a time when the business was needing to "survive, sustain, or grow"? [every business has all of those phases]
Thanks a lot.
> What growth metrics did Tiny look at?
I assume you mean during the application process. So they asked just the basic stuff, MRR, growth, churn. We were at $1k5 MRR when we applied and $3k when we got it. I think what worked for us during the process was that Kevin had been running a small Java web scraping blog + book at that time.
> Did the investment come at a time when the business was needing to "survive, sustain, or grow"?
We were slowly switching from survival to sustain mode. They allowed to make the transition and go full grow mode.
Re: How we bootstrapped our SaaS to $1M ARR
#45Earlier quoted context omitted.
bootstrap = on your own. That's it. You had some seed funding.
Founder of another TonySeed startup. On your own can mean many things. I also burnt through my personal savings for the first year. So. On your own is just “VC’ed yourself” Taking money from TinySeed is very different than taking money from VC.
> So. On your own is just “VC’ed yourself”
Well, yes. You're assuming the risk, not an external firm that in exchange demands a chunk of the company.
In a truly bootstrapped company the risk is yours alone as is the potential reward.
Re: How we bootstrapped our SaaS to $1M ARR
#46Earlier quoted context omitted.
Co-founder here, I was waiting for this comment to be honest. So in essence, if you consider that bootstrapping is building a business without external funding, you're correct. But to me, bootstrapping VS "VC road" is much more nuanced than this. Going the VC road forces you to have crazy growth and raise more round because the VC model only works if they fund unicorn 1 time out of 100(0). TinySeed works even if they…
To me, it's really important that the tech community define "bootstrapping" as no more and no less than "having a plan to reach profitability with total investment on the order of what a [not-outrageously-wealthy] group of founders might invest," and to frame it as a good thing . With TinySeed's round at "$120k for the first founder, $60k for the second, and $40k for the third" ( https://tinyseed.com/program#program-…
> it's really important that the tech community define "bootstrapping"
More importantly we should probably define what a "startup" is. No one seems to agree on a definition there.
Re: How we bootstrapped our SaaS to $1M ARR
#47Earlier quoted context omitted.
Co-founder here, I was waiting for this comment to be honest. So in essence, if you consider that bootstrapping is building a business without external funding, you're correct. But to me, bootstrapping VS "VC road" is much more nuanced than this. Going the VC road forces you to have crazy growth and raise more round because the VC model only works if they fund unicorn 1 time out of 100(0). TinySeed works even if they…
>But to me, bootstrapping VS "VC road" is much more nuanced than this. I went to the "TinySeed.com" website landing page and I do see that they prominently advertise "The First Accelerator Designed for SaaS Bootstrappers" . And then their FAQ page has these example financial terms: >TinySeed invests $120k for the first founder, $60k for the second, and $40k for the third. Our standard terms are for 10-12% equity. --…
I guess we can debate the existence of the “True Bootstrapper”, but that’s not a very interesting conversation.
The term “bootstrapping” predates the existence of funding sources like TinySeed, and is now outdated. It was never terribly precise anyway, e.g. if someone saves up an “initial investment” amount of money before starting, are they bootstrapping? What about having a spouse who pays the bills while starting?
The digital age has also introduced a whole new range of funding options that didn’t exist very long ago, crowdfunding for example.
Re: How we bootstrapped our SaaS to $1M ARR
#48Earlier quoted context omitted.
Co-founder here, I was waiting for this comment to be honest. So in essence, if you consider that bootstrapping is building a business without external funding, you're correct. But to me, bootstrapping VS "VC road" is much more nuanced than this. Going the VC road forces you to have crazy growth and raise more round because the VC model only works if they fund unicorn 1 time out of 100(0). TinySeed works even if they…
To me, it's really important that the tech community define "bootstrapping" as no more and no less than "having a plan to reach profitability with total investment on the order of what a [not-outrageously-wealthy] group of founders might invest," and to frame it as a good thing . With TinySeed's round at "$120k for the first founder, $60k for the second, and $40k for the third" ( https://tinyseed.com/program#program-…
That is very elegantly said.
100% agree with you.
Re: How we bootstrapped our SaaS to $1M ARR
#49Earlier quoted context omitted.
"VC'd yourself" is the definition of bootstrapping. You either take money from someone else or you bootstrap it yourself.
It's kind of disingenuous to try to make this same comparison across different people. What if you borrow money from family in order to start your business? Are you no longer "bootstrapping"? What is Bezos decides he's bored, and wants to start something new. Really looking forward to seeing the "most successful bootstrapper of 2030" be Jeff Bezos with his self-funded $5B "startup".
This
Re: How we bootstrapped our SaaS to $1M ARR
#50Earlier quoted context omitted.
>But to me, bootstrapping VS "VC road" is much more nuanced than this. I went to the "TinySeed.com" website landing page and I do see that they prominently advertise "The First Accelerator Designed for SaaS Bootstrappers" . And then their FAQ page has these example financial terms: >TinySeed invests $120k for the first founder, $60k for the second, and $40k for the third. Our standard terms are for 10-12% equity. --…
I guess we can debate the existence of the “True Bootstrapper”, but that’s not a very interesting conversation. The term “bootstrapping” predates the existence of funding sources like TinySeed, and is now outdated. It was never terribly precise anyway, e.g. if someone saves up an “initial investment” amount of money before starting, are they bootstrapping? What about having a spouse who pays the bills while starting?…
>I guess we can debate the existence of the “True Bootstrapper”, but that’s not a very interesting conversation.
I'm a language descriptivist not prescriptivist so I don't care to debate it but just pointing out that the founders are using "bootstrapped" in a confusing way that contradicts how others understand it. (Which then causes meta discussion of founders trying to educate readers on the nuances of what "bootstrap" means.)
Compare the financial equity cap table terms to YC. When YC terms were $120k for 7% equity, people (generally) didn't call all those annual YC batch applicants "bootstrap companies". E.g. we (generally) did not say "DropBox is a bootstrapped company", "AirBNB is a bootstrapped company". But TinySeed funding means it's a bootstrapped company?!?
Doesn't that seem inconsistent?
Taking outside funding from professional investors for equity stakes typically wasn't seen as bootstrapping.
My point is that it's a whole heck of a lot easier if you shed the "bootstrap" label when the financial status changes. It's not a flaw or being evil to lose that label. Why is it so psychologically necessary to keep it?