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To me, it's really important that the tech community define "bootstrapping" as no more and no less than "having a plan to reach profitability with total investm

by btown 5y ago

To me, it's really important that the tech community define "bootstrapping" as no more and no less than "having a plan to reach profitability with total investment on the order of what a [not-outrageously-wealthy] group of founders might invest," and to frame it as a good thing. With TinySeed's round at "$120k for the first founder, $60k for the second, and $40k for the third" (https://tinyseed.com/program#program-faq https://tinyseed.com/program#program-faq) this is very much along those lines. If one further gatekeeps the label with "but the founders need to invest this personally or it doesn't count..." that restricts the label to a very small segment of privileged individuals. And in a world where there's a (false) narrative of a "bootstrapped or VC backed" binary, that gatekeeping reinforces the notion that less privileged founders have no choice but to go the VC route or do nothing at all. I would hazard a guess that great ideas and great societal impacts have been lost as a result of this framing.

mbesto 5y ago
> it's really important that the tech community define "bootstrapping" More importantly we should probably define what a "startup" is. No one seems to agree on a definition there.
daolf 5y ago
That is very elegantly said. 100% agree with you.
jasode 5y ago
>, it's really important that the tech community define "bootstrapping" as [...] With TinySeed's round at "$120k for the first founder, $60k for the second, and $40k for the third" (https://tinyseed.com/program#program-faq https://tinyseed.com/program#program-faq) this is very much along those lines. But when YC invested $120k for 7% equity, we typically didn't call all those startups like Dropbox/AirBNB etc "bootstrapped companies". And $180k for 2 founders is more than YC's previous terms. >If one further gatekeeps the label with It's unfair to call it "gatekeeping" rather than a case of confusing many readers with a headline that flips the meaning of "bootstrapping".
- btown 5y ago
  You're eliding the most important part of the definition IMO: a plan to reach profitability with the initial investment alone. YC never expects its companies to become profitable with their investment alone, nor should it - it's designed for growth companies that will receive multiple rounds of funding over time!
  - rkk3 5y ago
    ? I thought a major component of YC was getting to Default Alive & Ramen Profitability.
Zababa 5y ago
$120k is an big amount of money, especially for people that don't have FAANG salaries. That could be an appartment where I live. A small one, but an appartment. It's also 3 years of earnings for me, or it would be if I didn't spend anything. > If one further gatekeeps the label with "but the founders need to invest this personally or it doesn't count..." that restricts the label to a very small segment of privileged individuals. People for which $120k is money that people around them can just invest are a very small segment of priviliged individuals. Another point: tinyseed also offers mentorship. From the FAQ: > I don’t need the money, is TinySeed worth it just for the mentorship? > Short answer: yes. This message is not to knock on the people behind ScrapingBee. Bootstrapped or not, they have built a very profitable business, that's impressive and deserves praise. I just think calling it "bootstrapped" is not correct.
codegeek 5y ago
If you take money in exchange for equity, that is NOT bootstrapping no matter what spin we put on it. If the business fails, founders are not personally liable to return that money that was raised from investors. That is not bootstrapping. Bootstrapping is your ability to come up with money on your own or through loans etc which you are liable to pay back. If you don't you could lose your home. Investors don't come for your home when you lose their money.
no_wizard 5y ago
Why is that a problem? Bootstrapping is a privilege, just like raising any VC funding is, yet nobody is fighting to change the term for Venture Capital funded startups. The meaning of which has been well established, both inside tech circles and outside, to mean starting a business without raising any outside capital. Why do we want to suddenly stretch the meaning of bootstrap? The compelling story here would have been "how we created a SaaS business with 1M ARR with only seed funding", and I'd still have read it. That is something worth being proud of, why is bootstrap better?
- rhizome 5y ago
  >Why do we want to suddenly stretch the meaning of bootstrap? Because VCs increase the risk that a company will turn to shit.
  - no_wizard 5y ago
    Doesn't make it okay to stretch the meaning of something that is well established. Not all VCs are bad, not all companys funded by VC money turn into crap. Not all VCs use the same model. It would be best to explain this. Like I mentioned, why not plainly explain that they did all this with just seed money? That's a really amazing accomplishment in and of itself, and nuance is something that can be explained. Not to mention, trying to stretch the meaning here is trying to glob a positive onto something that didn't earn it by fitting the definition. Again, why try to obfuscate the truth? Be proud of your background if you think you can be proud of it. Nothing wrong with that. Just don't try and redefine something that already has concrete meaning. That's nearly the same thing, in my mind, as lying.
    - rhizome 5y ago
      We don't disagree!
threeseed 5y ago
> having a plan to reach profitability with total investment on the order of what a [not-outrageously-wealthy] group of founders might invest $120k USD is a lot of money for many international startups. 10-20 years ago it was also a lot of money for US startups to receive early in their journey. So this definition is pretty pointless.

by btown 5y ago

mbesto 5y ago

> it's really important that the tech community define "bootstrapping" More importantly we should probably define what a "startup" is. No one seems to agree on a definition there.

daolf 5y ago

That is very elegantly said. 100% agree with you.

jasode 5y ago

>, it's really important that the tech community define "bootstrapping" as [...] With TinySeed's round at "$120k for the first founder, $60k for the second, and $40k for the third" (https://tinyseed.com/program#program-faq https://tinyseed.com/program#program-faq) this is very much along those lines. But when YC invested $120k for 7% equity, we typically didn't call all those startups like Dropbox/AirBNB etc "bootstrapped companies". And $180k for 2 founders is more than YC's previous terms. >If one further gatekeeps the label with It's unfair to call it "gatekeeping" rather than a case of confusing many readers with a headline that flips the meaning of "bootstrapping".

btown 5y ago
You're eliding the most important part of the definition IMO: a plan to reach profitability with the initial investment alone. YC never expects its companies to become profitable with their investment alone, nor should it - it's designed for growth companies that will receive multiple rounds of funding over time!
- rkk3 5y ago
  ? I thought a major component of YC was getting to Default Alive & Ramen Profitability.

Zababa 5y ago

$120k is an big amount of money, especially for people that don't have FAANG salaries. That could be an appartment where I live. A small one, but an appartment. It's also 3 years of earnings for me, or it would be if I didn't spend anything. > If one further gatekeeps the label with "but the founders need to invest this personally or it doesn't count..." that restricts the label to a very small segment of privileged individuals. People for which $120k is money that people around them can just invest are a very small segment of priviliged individuals. Another point: tinyseed also offers mentorship. From the FAQ: > I don’t need the money, is TinySeed worth it just for the mentorship? > Short answer: yes. This message is not to knock on the people behind ScrapingBee. Bootstrapped or not, they have built a very profitable business, that's impressive and deserves praise. I just think calling it "bootstrapped" is not correct.

codegeek 5y ago

If you take money in exchange for equity, that is NOT bootstrapping no matter what spin we put on it. If the business fails, founders are not personally liable to return that money that was raised from investors. That is not bootstrapping. Bootstrapping is your ability to come up with money on your own or through loans etc which you are liable to pay back. If you don't you could lose your home. Investors don't come for your home when you lose their money.

no_wizard 5y ago

Why is that a problem? Bootstrapping is a privilege, just like raising any VC funding is, yet nobody is fighting to change the term for Venture Capital funded startups. The meaning of which has been well established, both inside tech circles and outside, to mean starting a business without raising any outside capital. Why do we want to suddenly stretch the meaning of bootstrap? The compelling story here would have been "how we created a SaaS business with 1M ARR with only seed funding", and I'd still have read it. That is something worth being proud of, why is bootstrap better?

rhizome 5y ago
>Why do we want to suddenly stretch the meaning of bootstrap? Because VCs increase the risk that a company will turn to shit.
- no_wizard 5y ago
  Doesn't make it okay to stretch the meaning of something that is well established. Not all VCs are bad, not all companys funded by VC money turn into crap. Not all VCs use the same model. It would be best to explain this. Like I mentioned, why not plainly explain that they did all this with just seed money? That's a really amazing accomplishment in and of itself, and nuance is something that can be explained. Not to mention, trying to stretch the meaning here is trying to glob a positive onto something that didn't earn it by fitting the definition. Again, why try to obfuscate the truth? Be proud of your background if you think you can be proud of it. Nothing wrong with that. Just don't try and redefine something that already has concrete meaning. That's nearly the same thing, in my mind, as lying.
  - rhizome 5y ago
    We don't disagree!

threeseed 5y ago

> having a plan to reach profitability with total investment on the order of what a [not-outrageously-wealthy] group of founders might invest $120k USD is a lot of money for many international startups. 10-20 years ago it was also a lot of money for US startups to receive early in their journey. So this definition is pretty pointless.