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These kinds of articles about VCs and companies offering to invest big funds used to give me hope, but now that I've participated in bootstrapping a startup, I

These kinds of articles about VCs and companies offering to invest big funds used to give me hope, but now that I've participated in bootstrapping a startup, I see these articles as bad news. They're going to fund my competition... Give them easy money and keep funding them until they get that big corporate exit and I'm out of business because my margins are too small and I can't afford bulk discount on Facebook advertising like they can with all that free money they got. You know that someone else is going to get that funding, but it's not going to be you. It's more likely to help your competitor than it is to help you (the reader of the article). This is bad news for the typical reader of this article.

__s 6y ago
This makes sure we continue having startups post about their incredible journey once they've established a good product
- cryptica 6y ago
  Haha, so true... and even the word "journey" sounds tacky in that context. You can send free money straight to my bank account at regular intervals and I could write all about my incredible journey; an inspiring story of struggle against all odds. ...The odds of not being able to afford a yacht within 5 years.
MattGaiser 6y ago
In a world of easy VC money (granted that may be over), how viable is bootstrapping in a competitive market?
- throwaway_1512 6y ago
  It’s not about viability anymore, if business takes a VC funding but if you honestly (and brutally honestly) think you can bootstrap then you have won the battle. VC funding is not a reversible step.
- gen220 6y ago
  It’s very viable. You just need to target a niche that’s too small for VCs to care for. You wouldn’t be able to bootstrap Uber or AirBNB, because the markets they’re selling into are huge. However, there is an abundance of <10Bn-sized markets/industries out there that a VC wouldn’t think to invest in, where bootstrapped companies with a tech focus can grow and take over.
- hw 6y ago
  Am working at a bootstrapped startup. Actually profitable. In a very competitive space. No VCs to answer to, no irresponsible burning of cash on marketing and bloating of engineering team. No AWS. No expensive SF office or lunches paid by VC money. Hiring is dictated by our revenue and profit growth, and no we don't spend VC money on absurdly overpriced engineers. Because we're run super lean, we've been able to hire more and spend more on marketing during these tough times while businesses are downsizing or putting a halt on hiring/marketing dollars. If the space you're getting into requires lots of capital, fundraising is unavoidable, but if you're thinking of even bootstrapping a company, it better be one that won't require a lot of capital (SaaS), and you need to run it lean.
JumpCrisscross 6y ago
> I'm out of business because my margins are too small and I can't afford bulk discount This is an economy of scale. It's caused by your competitors' capitalization, and it may be unsustainable since it's with respect to customer-acquisition versus production. If your competitors' unit economics work, they're strategically leveraging scale using capital. Not the other way. (If they don't, go into cockroach mode or sell to them.)
- TeMPOraL 6y ago
  I think GP's point is that these competitors can make the extra capital work even better because they're exit seekers - so their business is just a ticking time bomb that needs to be sold off before it collapses. You can squeeze that growth curve quite a bit if sustainability doesn't matter to you. Meanwhile GP is presumably trying to build an actual business - providing value to users in exchange for money.
fizixer 6y ago
Noob question but if you've already bootstrapped your startup, aren't you ahead of the competition and likely to get the funding, instead of the funding going to your competitor. Just trying to understand the context here: your competitors apply/get-approved before you do, or is it that you don't want to take the funding? (or something else going on).

__s 6y ago

This makes sure we continue having startups post about their incredible journey once they've established a good product

cryptica 6y ago
Haha, so true... and even the word "journey" sounds tacky in that context. You can send free money straight to my bank account at regular intervals and I could write all about my incredible journey; an inspiring story of struggle against all odds. ...The odds of not being able to afford a yacht within 5 years.

MattGaiser 6y ago

In a world of easy VC money (granted that may be over), how viable is bootstrapping in a competitive market?

throwaway_1512 6y ago
It’s not about viability anymore, if business takes a VC funding but if you honestly (and brutally honestly) think you can bootstrap then you have won the battle. VC funding is not a reversible step.
gen220 6y ago
It’s very viable. You just need to target a niche that’s too small for VCs to care for. You wouldn’t be able to bootstrap Uber or AirBNB, because the markets they’re selling into are huge. However, there is an abundance of <10Bn-sized markets/industries out there that a VC wouldn’t think to invest in, where bootstrapped companies with a tech focus can grow and take over.
hw 6y ago
Am working at a bootstrapped startup. Actually profitable. In a very competitive space. No VCs to answer to, no irresponsible burning of cash on marketing and bloating of engineering team. No AWS. No expensive SF office or lunches paid by VC money. Hiring is dictated by our revenue and profit growth, and no we don't spend VC money on absurdly overpriced engineers. Because we're run super lean, we've been able to hire more and spend more on marketing during these tough times while businesses are downsizing or putting a halt on hiring/marketing dollars. If the space you're getting into requires lots of capital, fundraising is unavoidable, but if you're thinking of even bootstrapping a company, it better be one that won't require a lot of capital (SaaS), and you need to run it lean.

JumpCrisscross 6y ago

> I'm out of business because my margins are too small and I can't afford bulk discount This is an economy of scale. It's caused by your competitors' capitalization, and it may be unsustainable since it's with respect to customer-acquisition versus production. If your competitors' unit economics work, they're strategically leveraging scale using capital. Not the other way. (If they don't, go into cockroach mode or sell to them.)

TeMPOraL 6y ago
I think GP's point is that these competitors can make the extra capital work even better because they're exit seekers - so their business is just a ticking time bomb that needs to be sold off before it collapses. You can squeeze that growth curve quite a bit if sustainability doesn't matter to you. Meanwhile GP is presumably trying to build an actual business - providing value to users in exchange for money.

fizixer 6y ago

Noob question but if you've already bootstrapped your startup, aren't you ahead of the competition and likely to get the funding, instead of the funding going to your competitor. Just trying to understand the context here: your competitors apply/get-approved before you do, or is it that you don't want to take the funding? (or something else going on).