Bootstrapped or VC-funded and why?
Business Marketing with Nika
32 replies
I see 2 opposite poles of people: One asks for VC en masse, and the other is adamant about bootstrapping and won't accept money.
Now I belong more to the second camp, which is quite paradoxical, considering that my very 1st project was supported by the fund a few years back. 😅
Well, it seems that when you do everything yourself with your finances, you have to get your hands dirty more and that is a more difficult path, which suits me better.
The other side of the matter, however, is that I lack some kind of knowledgeable advisory board which occurs with VCs.
Everything has its pros and cons and now I want to hear what suits you better and why.
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Mahdi Barkhordari@mahdibeee
I have been thinking about bootstrapping but based on previous experience that can only happen succesfully when you have a peace of mind about your daily expenses. This can be either a saving or a job on the side (a full time one will substantially lower your energy to commit and delays time to market). So I would say if you have savings for a year of minimum life costs, definitely go for bootstrap. If not, life is too short to go through the pain and raise funds. That being said, I definitely suggest building at least the mvp and some audience and then pitching and raising funds or you will lose a big chunk of business.
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@mahdibeee but in that case, the product is not completely yours when you fund. so i do not feel that freedom of decision-making.
Launching soon!
I'm open to VC funding but am happy to bootstrap. The first reason is that with one startup I launched, we got accepted into Antler's accelerator program but did not get funding, nor did we get much out of it. It felt very impersonal, cold, and like they tossed us aside once they decided not to invest. It wasn't easy emotionally.
With the product I'm launching here on Product Hunt, we recently got rejected by an accelerator after three rounds of interviews. It was also difficult emotionally.
I'm adamant to prove them wrong. It will be a feeling of great accomplishment when we achieve the success we will knowing we've done it on our own. 😁
The flip side is we would have liked the mentorship. But that's what books and communities are for, right?
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@dan_o_malley I get it. It is time-demanding and I do not feel like convincing some fund that I am worth investing. Instead, I want to create something that convinces end customers that the product is worth buying. (For some people this can be achievable only with VCs but I believe any other options are there)... it only seems to be more fancy and cool with the badge "VC-funded".
Launching soon!
@busmark_w_nika I agree. I want to focus on creating something of value for customers. No need for the VC-funded badge!
My plan is to bootstrap until clear product market fit, and then raise money. Some of the founders and companies I most respect did it this way, and it has worked out well for them.
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@nathancovey but you already exit one company (or two?) Were they funded?
@busmark_w_nika That one was funded. It was a great and also unique funding experience because one of the co-founders funded it, and then the rest of us were sweat equity.
Similarly to others I am open to both. Initially when starting my second business I was thinking to only bootstrap but now I am actually starting to see value in maybe opening up to VC funding.
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@david_patrykowski do you have any preferred funds?
I'm adamant to prove them wrong. It will be a feeling of great accomplishment when we achieve the success we will knowing we've done it on our own.
The flip side is we would have liked the mentorship. But that's what books and communities are for, right? VanillaGiftCardBalance com
Bootstrapped so far, but I always leave an open door. Life is too short to limit to one way or another.
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I have worked for funded startups, built and led engineering teams, only to feel burnt out. I started working on my current product as a passion project. I was quite sure I do not want to burn out. Instead I want to build a sustainable, profitable business.
In the last couple months I started getting lots of positive signals about the tech I am solving and decided to look for co-founders who are relaxed, ambitious and slow. This is not an easy ask but we are here - 4 of us. 3 of us are old friends/colleagues. We want a happy life above everything else. 3 of us are from engineering backgrounds but also 3 of us have played business roles many times.
We have discussed the VC approach and walked away from it every time. We are very confident of what we are building, constantly in touch with potential users/clients (we are b2b and b2c with the same underlying tech). We are shaping up the brand now, reaching out, building potential client-base and revenue focused. Let's see what happens.
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@brainless Brave decision. To finance everything from your pocket and time fund is not easy. The opposite. And the more respect I have for you.
I think this should be discussed case by case. For me, I prefer to bootstrap first to make sure the project starts in the right direction.
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@constance_tong yes – when the project is highly time and human force demanding – funding makes sense but those are usually huge huge projects serving states or countries (but the question is whether the government shouldn't contribute – but this is a very specific case to case). bootstrapping is pretty much about self-sufficiency in my eyes.
It depends on many factors and preferences.
At the very start it's a combination of personal preference and what type of company you are building. Not every business worth pursuing will have "venture scale" potential and that's not a bad thing either. A lot of founders make the early mistake of thinking that their business is something of venture scale, start trying to raise from VC's and get rejection after rejection. Besides having venture-scale potential, accepting VC capital isn't for everyone. You'll have to be accountable to others, your own position will be on the line as well and the way VC's build companies sometimes can lead to a dependence on outside capital for a long period of time which could lead to problems in a VC draught period.
In general, when you are building a venture that has the potential to become something huge, VC capital is probably going to be required and useful. That said, I'd suggest to founders to get traction going first with no/minimal outside capital. You want to get to a position of strength when raising and in the early stages, traction combined with m-o-m double/triple digit growth is what will make VC's want to speak with you - they might even hunt you (no pun intended).
Happy to help anyone planning to raise, that's literally all I do! Feel free to reach out to me on Linkedin. Soon launching https://raisebetter.capital - a platform that will make fundraising easier than ever for founders.
@busmark_w_nika Happy to setup a call to get to know each other better! Let's schedule something through LinkedIn
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@busmark_w_nika Sure! SelfGro is a journaling app for self-therapy (developed by therapists) https://www.selfgro.co/. I’ll be launching it soon here on PH. We started with Financial Growth program, but there’s more coming— focused on relationships, self-love, etc are on the way. This is my passion and mission and these programs helped me a lot in my personal life and even when raising a VC round (I had a limited money mindset!). So SelfGro is kinda my baby, and I decided to keep it as my own project.
My second business is a B2B company focused on drone technology for agriculture. It’s a different ball game—we've raised VC money in the past, and with agritech being so capital intensive, we decided to go with VC funding from day one.
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Not every startup should be funded. It depends on the potential scale, and the complexity of the project. Try to bootstrap Mars colonization or neuro-brain-chip implantation.
Moreover, if we take 2 similar projects for the same ICP, one is bootstrapped and another one is VC funded, which one has more chances to succeed?
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@alexander_kovalov This is the point I am talking about – when is something very huge – you won't make it with your finances (if you are not a multi-billionaire). VCs can help to some extent and with certain products but in many cases (because not everybody colonises Mars) bootstrapped projects should be the 1st option. [who knows, maybe I just do not wanna rely on someone else money]
I bootstrapped Fitness Central because I want to grow it organically and it is a product that I truly believe in that the world needs. I want the product to last a lifetime.
Launching soon!
Bootstrapped is preferred always. But for a large scale project, it's a smart move to find a reliable financing partner.