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What a terribly muddled and bipolar article full of unsupported generalizations and platitudes. Author writes -- "Moreover, not raising money from professional
by asanwal 15y ago
What a terribly muddled and bipolar article full of unsupported generalizations and platitudes.
Author writes -- "Moreover, not raising money from professional investors is—in all honesty—a potential red flag. It’s rare for an entrepreneur to run a business and spend millions of dollars without having any outside help."
Is there any data to prove this is a red flag? And rare? Nope. Speaking from experience, our bootstrapped firm has closed many enterprise clients without having raised VC. VC may help and be requisite in certain areas, but it certainly is not necessary.
Author writes - "Ultimately, while you may score extra points for building a large business despite being bootstrapped, you don’t actually score many points for running a small business if you have avoided venture capital..."
What does "winning points" have to do with anything? I suspect he's referring to some sort of ego gratification, but I'm not sure. If you run a business in which you feel you are adding value to customers/the world, growing at the rate you want, are in control, working with people you like and are financially where you want to be, I'm not sure what "points" have to do with anything.
Author writes -- "When it’s said and done, you can own 100% of a lemonade stand or 1% of Coca-Cola."
This is a false dichotomy, i.e., bootstrapped companies are "lemonade stands" and VC backed companies are Coca-Cola. VC backing is no guarantee of success.
Ultimately, there is nothing wrong or overrated about either path. Whichever is the right way to get you to where you want is what you should do.
Disclosure: I run a bootstrapped firm. One of our firm's primary customer groups is VCs.
- derefr 15y ago> What does "winning points" have to do with anything? I'm guessing these "points" are on the axis of your company's reputation or visibility among VCs/investors/other groups of rich people who attend parties together—and also that the author believes that that reputation plays a role in who large corporates like Google decide to buy, and how much they're willing to pay. Of course, one of the signs of a VC-focused mindset is that it doesn't occur to the author that one might run a company not to seek a buy-out, but rather to actually get some black figures on the balance sheet and pocket them.
- asanwal 15y agoGood point/inference. Probably a topic for a whole other conversation -- should one build a company with the goal of being acquired? But that's another can of worms entirely :)
- rprasad 15y agoCoca cola was bootstrapped out of a single drug store back in the 1880s. I think the TC author needs to get his facts straight.
- hristov 15y agoI agree. There are actually some good reasons to seek VC funding even if it is possible to bootstrap, but the author managed to miss them. Instead he centered on some really bad reasons.