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I think there's a happy path between bootstrapping your own company and taking millions in VC funding, where you can place your customers ahead of delivering in

I think there's a happy path between bootstrapping your own company and taking millions in VC funding, where you can place your customers ahead of delivering investor returns but not have to design your products and roadmaps due to financial limitations. On that note, TinySeed is open for applications until 2/15 :) https://tinyseed.com/ https://tinyseed.com/ (I'm not affiliated with them, but I read Rob Walling's "Start Small, Stay Small" and it was the best book out of 70ish books I've read in two years)

bsbechtel 8y ago
There is....there are investors who don't require 100x returns. It's just harder to find them, they're usually more risk averse, and you'll need a way to return their money that doesn't necessarily include an IPO.
- d0m 8y ago
  Not clear to me why someone would want to invest in high risk startups for a low-mid return.. there are much safer options that would give similar returns.
  - qqqwerty 8y ago
    From my understanding, VC funds as an asset class don't perform that well. A few of them hit the jackpot, but if someone spreads their bets across a number of funds, I would be surprised if they beat the market. So keep that in mind when comparing returns. Another thing to consider, is that focusing on the 'middle road' does not necessarily preclude a company from swinging for the fences, it merely sets the incentives such that getting to profitability sooner is advantageous. They do this by encouraging dividends as a form of compensation, but the company still has the option of going the VC route. So if anything, I think this structure is the best of both worlds. If a company can take ~$100k in seed for ~10% in equity and turn that into a small business worth $10M, that is a 10x return. But if it looks like they are on to something bigger, they can raise another round and keep grinding.
jeffshek 8y ago
I've been following TinySeed for a few weeks now, it's such an interesting idea! Another great book that I'd recommend is Lost and Founder (TinySeed's terms are based on the Rand Fishkin's most recent startup terms).

bsbechtel 8y ago

There is....there are investors who don't require 100x returns. It's just harder to find them, they're usually more risk averse, and you'll need a way to return their money that doesn't necessarily include an IPO.

d0m 8y ago
Not clear to me why someone would want to invest in high risk startups for a low-mid return.. there are much safer options that would give similar returns.
- qqqwerty 8y ago
  From my understanding, VC funds as an asset class don't perform that well. A few of them hit the jackpot, but if someone spreads their bets across a number of funds, I would be surprised if they beat the market. So keep that in mind when comparing returns. Another thing to consider, is that focusing on the 'middle road' does not necessarily preclude a company from swinging for the fences, it merely sets the incentives such that getting to profitability sooner is advantageous. They do this by encouraging dividends as a form of compensation, but the company still has the option of going the VC route. So if anything, I think this structure is the best of both worlds. If a company can take ~$100k in seed for ~10% in equity and turn that into a small business worth $10M, that is a 10x return. But if it looks like they are on to something bigger, they can raise another round and keep grinding.

jeffshek 8y ago

I've been following TinySeed for a few weeks now, it's such an interesting idea! Another great book that I'd recommend is Lost and Founder (TinySeed's terms are based on the Rand Fishkin's most recent startup terms).