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> There are plenty of independent SaaS businesses that make it past $200K ARR per person with teams of <10 Which is great for companies aiming to stay small an

> There are plenty of independent SaaS businesses that make it past $200K ARR per person with teams of <10 Which is great for companies aiming to stay small and self-bootstrapped. There's nothing wrong with this model for founders who want to stay independent. The VC alternative allows companies to grow faster than organic revenue growth might allow. It can take a long time for a 10-person company with $2mm ARR to grow to $2.2mm ARR so they can hire the next person they need. Alternatively, they can take VC money and hire the next 100 people they need without waiting for revenue to get there first. One model isn't inherently better than the other. The important thing is for founders to decide which type of company they want to be and stick to it. A founder who wants to grow organically is going to have a bad time if they take money from investors who want growth. A founder who wants to grow as fast as possible is going to have a bad time if they're constantly stuck waiting for organic growth to let them make the next hire.

ketzo 5y ago
I like this comment. The archetype of the bootstrapped "lifestyle" software company is quite popular on HN, and for good reason, and venture capital often the subject of (often well-deserved!) criticism; but hey, the VC business model exists (and produces some spectacular successes) for a reason.
dcolkitt 5y ago
The other point to add is that while the organic business is waiting to get from $2mn to $3mn, their VC funded competitor can throw 100 people at the problem and eat the entire market. The point is if you’re in a VC heavy space, you often have no choice but to dance along with the music.
- golergka 5y ago
  That's great until the music stops and you find out who's left standing without a chair.
  - floridageorgia 5y ago
    Do you mind explaining this? This is what I understood it to mean: a startup grows marketshare rapidly with VC money infusion in an easy money environment. But when credit dries up like it did in 2008, the startup could be left hanging as VCs might not fund the next round of their previously star startups as they want to deploy resources to their absolutely top-rung startups. So, even good startups can be left stranded. That's the feeling I have. Would like to know if my thinking is on the right track.

ketzo 5y ago

I like this comment. The archetype of the bootstrapped "lifestyle" software company is quite popular on HN, and for good reason, and venture capital often the subject of (often well-deserved!) criticism; but hey, the VC business model exists (and produces some spectacular successes) for a reason.

dcolkitt 5y ago

The other point to add is that while the organic business is waiting to get from $2mn to $3mn, their VC funded competitor can throw 100 people at the problem and eat the entire market. The point is if you’re in a VC heavy space, you often have no choice but to dance along with the music.

golergka 5y ago
That's great until the music stops and you find out who's left standing without a chair.
- floridageorgia 5y ago
  Do you mind explaining this? This is what I understood it to mean: a startup grows marketshare rapidly with VC money infusion in an easy money environment. But when credit dries up like it did in 2008, the startup could be left hanging as VCs might not fund the next round of their previously star startups as they want to deploy resources to their absolutely top-rung startups. So, even good startups can be left stranded. That's the feeling I have. Would like to know if my thinking is on the right track.