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Bootstrapping is tough, especially when you finally build a product and get a paying customer only to read about founders raising $mn without an MVP. Comparison

Bootstrapping is tough, especially when you finally build a product and get a paying customer only to read about founders raising $mn without an MVP. Comparison with FAANG jobs are meaningless to some degree because the value of freedom and creating a business is so much greater than the value of a comp package. Also, corporate BS. As a founder you only have to deal with your own BS!

ramraj07 5y ago
Could you clarify what you’re saying? Are you saying bootstrapping is better or vc funding is better?
- dougSF70 5y ago
  Bootstrapping is better unless your start up is capital intensive.
- codegeek 5y ago
  "better" is subjective. Bootstrapped gives you more control over the business but it also makes it harder to expand once you have product market fit (exceptions are always there). Bootstrapped means you most likely have yourself or may be another co-founder who have to share the burden of all the challenges and downsides. Bootstrapped means you probably cannot pay the best money to top talent and unless you are in an upcoming/hot space, you will have trouble attracting the best talent. VC funding brings tons of its own challenges. Right off the bat, you now have a pressure to deliver a fast paced/hockey stick growth or your investors won't make money. Making money for investors becomes a higher or at least same priority as making revenue for the company in general. You now have to answer to people you would rather not in many cases. Not to mention the public scrutiny it brings. However, the plus of VC backed is that you have money to attract top talent and can offer a lot of incentives that are harder as a bootstrapped company. I think everyone should do their 1st company bootstrapped (I am biased obviously). This will force you to be frugal with spending habits while trying to optimize revenue with least waste. It will also make you come up with creative ways to survive/grow and find product market fit. The downside is that you may run out of money or never reach enough traction as you may not be able to build a great team quick enough in cases. I would say it depends on your goal. If you want to grow super fast and build a billion dollar company, you definitely want to go the VC route. If you want to start something that replaces your job and then may be grow a bit more with a small team, bootstrapped is the way to go. Sometimes a bootstrapped business can become VC backed and vice versa.
  - dougSF70 5y ago
    I think attracting top talent is a point worth exploring. Surely with all venture back start ups , having money to attract talent doesnt mean you will attract talent. ...competitors have money too. Furthermore, what is top talent? From a top school? Possibly, but not definitely. Also has anyone shown that top talent is a necessary and sufficient condition for success. Personally I think the measures of assessing talent are moderate predictors of success. Scarcity of resource drives up talent costs not effectiveness of talent (i.e. the talentedness of candidates)
    - dougSF70 5y ago
      Adding to this, there are plenty of well funded start ups stuffed full of talent that have failed. Talent is one ingredient, but if the product is good enough you probably dont need to pay for top talent,you only think you do.
jsiaajdsdaa 5y ago
How do founders deal with the psychological stress of knowing they could be sued or patent trolled at any point in time? This is the only reason I don't start my own company, and if I did then I would try to have VC money lying around for lawyers. It's really messed up!
- justinclift 5y ago
  Public liability insurance? ;)
  - rezbull 5y ago
    You will end up either paying high premiums or handing your money to patent trolls. Neither option sounds optimal as a bootstrapped founder.
- dougSF70 5y ago
  Most start ups run out of money before they are sued. Patent trolls tend to go after firms that have money to pay them off. As such, patent trolls are not a concern for most founders.
  - jsiaajdsdaa 5y ago
    That is one option then-- lay low until you have enough money to pay them. But what about psychotic people who are suing you for reasons of harassment? i would be really mad if the reason my business failed was legal stuff and not product market fit
    - dougSF70 5y ago
      A psychotic person who has the money to pay an attorney to draft a law suit....that is more unlikely that building a unicorn and it's a whole lot more productive to focus on that rather than bad actors out to harras you.
      - 5y ago

ramraj07 5y ago

Could you clarify what you’re saying? Are you saying bootstrapping is better or vc funding is better?

dougSF70 5y ago
Bootstrapping is better unless your start up is capital intensive.
codegeek 5y ago
"better" is subjective. Bootstrapped gives you more control over the business but it also makes it harder to expand once you have product market fit (exceptions are always there). Bootstrapped means you most likely have yourself or may be another co-founder who have to share the burden of all the challenges and downsides. Bootstrapped means you probably cannot pay the best money to top talent and unless you are in an upcoming/hot space, you will have trouble attracting the best talent. VC funding brings tons of its own challenges. Right off the bat, you now have a pressure to deliver a fast paced/hockey stick growth or your investors won't make money. Making money for investors becomes a higher or at least same priority as making revenue for the company in general. You now have to answer to people you would rather not in many cases. Not to mention the public scrutiny it brings. However, the plus of VC backed is that you have money to attract top talent and can offer a lot of incentives that are harder as a bootstrapped company. I think everyone should do their 1st company bootstrapped (I am biased obviously). This will force you to be frugal with spending habits while trying to optimize revenue with least waste. It will also make you come up with creative ways to survive/grow and find product market fit. The downside is that you may run out of money or never reach enough traction as you may not be able to build a great team quick enough in cases. I would say it depends on your goal. If you want to grow super fast and build a billion dollar company, you definitely want to go the VC route. If you want to start something that replaces your job and then may be grow a bit more with a small team, bootstrapped is the way to go. Sometimes a bootstrapped business can become VC backed and vice versa.
- dougSF70 5y ago
  I think attracting top talent is a point worth exploring. Surely with all venture back start ups , having money to attract talent doesnt mean you will attract talent. ...competitors have money too. Furthermore, what is top talent? From a top school? Possibly, but not definitely. Also has anyone shown that top talent is a necessary and sufficient condition for success. Personally I think the measures of assessing talent are moderate predictors of success. Scarcity of resource drives up talent costs not effectiveness of talent (i.e. the talentedness of candidates)
  - dougSF70 5y ago
    Adding to this, there are plenty of well funded start ups stuffed full of talent that have failed. Talent is one ingredient, but if the product is good enough you probably dont need to pay for top talent,you only think you do.

jsiaajdsdaa 5y ago

How do founders deal with the psychological stress of knowing they could be sued or patent trolled at any point in time? This is the only reason I don't start my own company, and if I did then I would try to have VC money lying around for lawyers. It's really messed up!

justinclift 5y ago
Public liability insurance? ;)
- rezbull 5y ago
  You will end up either paying high premiums or handing your money to patent trolls. Neither option sounds optimal as a bootstrapped founder.
dougSF70 5y ago
Most start ups run out of money before they are sued. Patent trolls tend to go after firms that have money to pay them off. As such, patent trolls are not a concern for most founders.
- jsiaajdsdaa 5y ago
  That is one option then-- lay low until you have enough money to pay them. But what about psychotic people who are suing you for reasons of harassment? i would be really mad if the reason my business failed was legal stuff and not product market fit
  - dougSF70 5y ago
    A psychotic person who has the money to pay an attorney to draft a law suit....that is more unlikely that building a unicorn and it's a whole lot more productive to focus on that rather than bad actors out to harras you.
    - 5y ago