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> This counts on the bootstrapped company tapping outside capital once they hit their stride. No, it doesn't; if a bootstrapped startup hits exponential growth
by JoshTriplett 6y ago
> This counts on the bootstrapped company tapping outside capital once they hit their stride.
No, it doesn't; if a bootstrapped startup hits exponential growth, they can be revenue funded and still hard to catch up to by just copying them.
- keenmaster 6y agoSome growth hacks are hard to fund with bootstrap revenue. One example is Paypal's $20 signup bonus when they started out. The bonus tapered off to lower amounts over time, but it was still super expensive (~$70 million!).
- JumpCrisscross 6y ago> they can be revenue funded and still hard to catch up to by just copying them Capital financing can provide five to twenty years’ operational cash flows in a single go. It takes deep moats to outgrow someone copying you and simultaneously expanding into every market you would have taken the coming decade. This is a standard scale playbook by the way. When your competitor can scale faster, but refuses to for political (control) or ideological reasons, it leaves a strategic opening.