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Companies that aren't capital intensive (most software companies) don't need VC funding. I'm the cofounder of Eureka Surveys (eurekasurveys.com). We're based ou

Companies that aren't capital intensive (most software companies) don't need VC funding. I'm the cofounder of Eureka Surveys (eurekasurveys.com). We're based out of Utah, bootstrapped, and have been profitable since our inception. Retaining 100% control of the company has been invaluable to our success - not needing to become a unicorn in X years is a competitive advantage.

giantg2 5y ago
Nice! Keep that capital with the workers/founders instead of increasing the wealth of greedy VCs.
- tfang17 5y ago
  And to our employees!
- whall6 5y ago
  Let’s not forget that greedy VCs can’t invest in your business without YOUR approval.
  - giantg2 5y ago
    Which was the action I am applauding them on - the choice not to use VC.
  - mandelbrotwurst 5y ago
    Sure, but if they’re systematically subsidizing the growth path of your competitors, giving them a massive advantage, withholding that approval becomes a tougher call.
MattGaiser 5y ago
Isn't the survey space enormously fragmented though? Is there something that prevents a company from spending a billion dollars and wiping out everyone in the space? Are there just too many niches?
- tfang17 5y ago
  Yes, fragmented, but not a big enough market to make it worth it for a large entrant to spend blindly.
- x0x0 5y ago
  that's (imo) the downside to bootstrapping -- you're likely putting a ceiling on the company. There are only a handful of bootstrapped multibillion dollar companies (github, atlassian, patagonia) and even single billion (mailchimp). Still, that ceiling can be quite high; I know a couple folks doing north of $100m annually that bootstrapped.
  - tfang17 5y ago
    Personally, I'm happy building a smaller company. We're an LLC, so we're allowed to take draws at the end of each year vs. having to wait for a liquidity event (IPO or acquisition).
    - x0x0 5y ago
      I did a vc company; my next one is 100% going to be smaller and bootstrapped if at any way possible. I definitely think it's the way to go for founders and tends to lead to better outcomes. That said, I don't think most saas -- particularly midmarket or enterprise targeting -- can be bootstrapped. You just require too much engineering (ie eng salaries) in the first couple years to self-fund.
      - tfang17 5y ago
        Both my cofounder and I are technical and code - helps save a lot on costs!
whall6 5y ago
This is such an old and tiresome argument. First, just because you made it work, doesn’t mean that applies to everyone. Congrats on your success, but let’s not generalize with one data point. Second, what about marketing costs? What about a first-mover advantage and staffing up to win that advantage? What if you want to tap into a network (YC, tech stars, etc.)? What if you really value the good feeling of being validated by having a round of financing? What if bu raising capital you get attention that kickstarts your business that otherwise wouldn’t have come?
- tfang17 5y ago
  Not making the argument that VC is bad across the board - companies that require a large amount of startup capital (fintech, space, deep tech) wouldn't exist without VC funding. We've actually grown entirely through word of mouth. 0 ad spend after 2 years. We also happen to be a late entrant to the market. Companies like Swagbucks have been around since 2008.
- hluska 5y ago
  I don’t catch how a founder sharing success is an old and tiresome argument. Rather, it’s a common path that many founders have had incredible success with. There’s no particular reason to raise money just as there’s no particular reason to bootstrap. Good founders found successful companies using the most appropriate tools. In this case, you just accused someone successful of an old and tiresome argument. That’s unhelpful at best.
- Kranar 5y ago
  Tiresome? It's hardly ever discussed on this site.
- omgwtfbbq 5y ago
  >First, just because you made it work, doesn’t mean that applies to everyone. Congrats on your success, but let’s not generalize with one data point. This is bizarre because I think most reasonable people would make an identical argument against taking VC money.. >Second, what about marketing costs? What about a first-mover advantage and staffing up to win that advantage? What if you want to tap into a network (YC, tech stars, etc.)? What if you really value the good feeling of being validated by having a round of financing? What if bu raising capital you get attention that kickstarts your business that otherwise wouldn’t have come? If you are profitable and growing according to plan then none of these are good reasons at all to accept VC money..
bilater 5y ago
Wow - nice work. I'm honestly surprised firms will pay $1 for just a single response and also not gravitate towards a fixed cost survey solution instead.
- tfang17 5y ago
  $1 is actually significantly cheaper than industry average. Most providers charge upwards of $5. We're able to cut costs by connecting you directly to end respondents and cutting out middlemen - our proprietary panel is over 1M respondents large now.
hef19898 5y ago
Totally agree, I tried and failed. Kudos for making it! And keep it up!
- tfang17 5y ago
  Thanks!
bsder 5y ago
> Companies that aren't capital intensive (most software companies) don't need VC funding. The converse problem is that there are lots of capital intensive companies, and none of them can get VC funding because the VCs are all chasing 18 month unicorns.

giantg2 5y ago

Nice! Keep that capital with the workers/founders instead of increasing the wealth of greedy VCs.

tfang17 5y ago
And to our employees!
whall6 5y ago
Let’s not forget that greedy VCs can’t invest in your business without YOUR approval.
- giantg2 5y ago
  Which was the action I am applauding them on - the choice not to use VC.
- mandelbrotwurst 5y ago
  Sure, but if they’re systematically subsidizing the growth path of your competitors, giving them a massive advantage, withholding that approval becomes a tougher call.

MattGaiser 5y ago

Isn't the survey space enormously fragmented though? Is there something that prevents a company from spending a billion dollars and wiping out everyone in the space? Are there just too many niches?

tfang17 5y ago
Yes, fragmented, but not a big enough market to make it worth it for a large entrant to spend blindly.
x0x0 5y ago
that's (imo) the downside to bootstrapping -- you're likely putting a ceiling on the company. There are only a handful of bootstrapped multibillion dollar companies (github, atlassian, patagonia) and even single billion (mailchimp). Still, that ceiling can be quite high; I know a couple folks doing north of $100m annually that bootstrapped.
- tfang17 5y ago
  Personally, I'm happy building a smaller company. We're an LLC, so we're allowed to take draws at the end of each year vs. having to wait for a liquidity event (IPO or acquisition).
  - x0x0 5y ago
    I did a vc company; my next one is 100% going to be smaller and bootstrapped if at any way possible. I definitely think it's the way to go for founders and tends to lead to better outcomes. That said, I don't think most saas -- particularly midmarket or enterprise targeting -- can be bootstrapped. You just require too much engineering (ie eng salaries) in the first couple years to self-fund.
    - tfang17 5y ago
      Both my cofounder and I are technical and code - helps save a lot on costs!

whall6 5y ago

This is such an old and tiresome argument. First, just because you made it work, doesn’t mean that applies to everyone. Congrats on your success, but let’s not generalize with one data point. Second, what about marketing costs? What about a first-mover advantage and staffing up to win that advantage? What if you want to tap into a network (YC, tech stars, etc.)? What if you really value the good feeling of being validated by having a round of financing? What if bu raising capital you get attention that kickstarts your business that otherwise wouldn’t have come?

tfang17 5y ago
Not making the argument that VC is bad across the board - companies that require a large amount of startup capital (fintech, space, deep tech) wouldn't exist without VC funding. We've actually grown entirely through word of mouth. 0 ad spend after 2 years. We also happen to be a late entrant to the market. Companies like Swagbucks have been around since 2008.
hluska 5y ago
I don’t catch how a founder sharing success is an old and tiresome argument. Rather, it’s a common path that many founders have had incredible success with. There’s no particular reason to raise money just as there’s no particular reason to bootstrap. Good founders found successful companies using the most appropriate tools. In this case, you just accused someone successful of an old and tiresome argument. That’s unhelpful at best.
Kranar 5y ago
Tiresome? It's hardly ever discussed on this site.
omgwtfbbq 5y ago
>First, just because you made it work, doesn’t mean that applies to everyone. Congrats on your success, but let’s not generalize with one data point. This is bizarre because I think most reasonable people would make an identical argument against taking VC money.. >Second, what about marketing costs? What about a first-mover advantage and staffing up to win that advantage? What if you want to tap into a network (YC, tech stars, etc.)? What if you really value the good feeling of being validated by having a round of financing? What if bu raising capital you get attention that kickstarts your business that otherwise wouldn’t have come? If you are profitable and growing according to plan then none of these are good reasons at all to accept VC money..

bilater 5y ago

Wow - nice work. I'm honestly surprised firms will pay $1 for just a single response and also not gravitate towards a fixed cost survey solution instead.

tfang17 5y ago
$1 is actually significantly cheaper than industry average. Most providers charge upwards of $5. We're able to cut costs by connecting you directly to end respondents and cutting out middlemen - our proprietary panel is over 1M respondents large now.

hef19898 5y ago

Totally agree, I tried and failed. Kudos for making it! And keep it up!

tfang17 5y ago
Thanks!

bsder 5y ago

> Companies that aren't capital intensive (most software companies) don't need VC funding. The converse problem is that there are lots of capital intensive companies, and none of them can get VC funding because the VCs are all chasing 18 month unicorns.