Bootstrap vs VC for SaaS?

I agree that if you have the chance to skip the seed round and grow with your own funds, it's better not to bring in early investors

We're VC funded but I really respect bootstrapped businesses! Also if you guys love an underdog story, please support Graphite today - we spent most of the day in #3 and are currently on track to overtake #1 :)

VC sounds fairly interesting when you create a successful product and your investors are not looking for results from day one of their investments! If any calculations go wrong, the founder will find him/herself raising the very next round they close their round number 'x'! Keep the control in your hands, try to go frugal, and plan out to go bootstrap.

The real answer is, it DEPENDS. And this is coming from me, a founder who's successfully bootstrapped a B2B saas co for the last 10 years and going (watch this space, we're launching a new suite of AI tools for ProdPad next Monday 😎 https://www.producthunt.com/prod...). But that's really the key: Ours was a B2B SaaS. We (my co-founder @simoncast and I) were able to build something that we could sell to a few businesses, and then a few more, and it wasn't long before ProdPad was paying our bills, and allowing us to expand our team alongside the growth of our customers. If you can go this route, DO IT. The VC track is risky and expensive. I'm really glad we didn't give away equity in the early days of ProdPad. However, the VC track might be for you. Some products need more R&D than others, if you're working in deep tech, hardware, or anything that requires building up more than just a simple sales motion. Building a marketplace or something for the B2C masses? You better have a war chest of cash on hand to carry you through the long slog while things build up, as the value for those types of businesses often don't make themselves immediately tangible on your balance sheet until way down the line. The key thing is is to know what you're building, how you're going to monetize, and therefore, allowing you to choose how you're going to fund it and build it more wisely. Happy building, folks!

I've selected bootstrap, that has been my journey over the past 3 years but I believe the correct answer lies somewhere between bootstrap and VC There are few, very few software businesses that can break even without funding Ideally, those funds should come from other sources and not VC but it's not accurate to advise everyone to bootstrap It is damn painful

Frugal always.

I'd say bootstrap to learn things the hard way, and I'd say VC if you want to then get into the rat race of chasing valuations and fund raising

I agree! Don’t choose VC at first, especially at this time, it can let you find true PMF and make money and Day 1

I think there is no silver bullet here; it depends on how you want to run the business but most of the times raising on favorable terms is a better choice. Especially in tech there a temporal aspect and the ability to move fast and grab your first few lighthouse customers is important. More often than not, having enough capital to execute on a business plan (by hiring sellers, marketing, expand to new markets etc.) is crucial so you might need to raise capital from a VC. Also there is the opportunity cost aspect; if you are building your startup then you are not doing other things that can help you career, so in my opinion you need to "fail fast". Running a healthy/cashflow positive business is great at the beginning because it will definitely give you a lot of leverage when raising but I also think raising capital is needed when you have to move fast and scale the business.

I'd say it depends on many factors, like your market and funding of competitors. In general, I think the best practice should be staying bootstrapped until you haven't validated product-market fit. Once you have that, bringing capital is the best way to start scaling fast.

It depends on your goals and risk tolerance. Bootstrap for control and slow growth, VC for rapid expansion with diluted ownership.

bootstrap

Embrace the bootstrap journey until it's absolutely necessary to pivot. This advice isn't limited to just SaaS; it applies to nearly any product. Venture capital funding doesn't just dilute your ownership significantly; it often imposes unrealistic revenue targets on early-stage companies that are still navigating uncharted waters. Moreover, countless ventures stumble because they haven't experienced the invaluable lessons of acquiring and retaining customers the hard way. There's something special about growing organically and adapting your strategies as you gain wisdom along the path.

Bootstrap all the way baby :D

The best way is not to wait investors and their money and build and promote your product yourself.

saas is best

If the goal is to scale and increase company valuation, VC is the way to go. VCs aim for rapid growth and scaling to achieve higher valuations and successful exits. This often comes with significant funding, fast expansion, and immense pressure on the founding team, potentially affecting company strategy and culture. However, if you're just looking for a steady income, bootstrapping is a great choice. This approach emphasizes steady growth and profitability, allowing founders to maintain full control without external investor pressures, operating at their own pace For me, I prefer Bootstrap.

Wonderful topic Roman and one I'm passionate about, in fact, we are launching Who Wants to be a Unicorn, a fundraising game later this morning to shed light on how venture capital really works. Check it out:)

Saas!!