3 ms·

"I might be biased but most cofounders who want to bootstrap was because they were afraid to do actual work. Raising funding requires hard rejections which they

"I might be biased but most cofounders who want to bootstrap was because they were afraid to do actual work. Raising funding requires hard rejections which they want to avoid as much as possible." This. I worked with a guy who tried to raise money, couldn't take all the rejections, never prepared for any of his meetings (didn't remember the names of people he met), and didn't understand the market he was operating in or what his product should or would do. After that "failed", he "pivoted" (his words) to "bootstrapping" which actually meant just not paying people. In his words, we would be paid when the product had sales. After people stopped showing up for work, he shifted the blame to the economy and "investor headwinds". Then he "pivoted" again to "crowdfunding". "Move fast and break stuff" he'd say when he would visit me a few times a week in the office. Eventually, at one of his visits he found that I wasn't there anymore either. This was followed by threatening phone calls and emails from his laywer/father. This guy had a big career at Fortune 500 and 100 companies and big tech before trying to start his own company. Guess the same skills that make one successful in corporate america don't translate into starting a real business.

deleted 2y ago
[deleted]
j45 2y ago
This isn't always true. Tech s tartups are more and more the core form of the business world. Most businesses that are successful in North America in any industry started self-funded. The cost of building software has fallen 10-100x compared to 10-20 years ago. Self-funding can be strategic, especially for experienced founders with industry chops. Waiting for VC green light might waste time you could spend learning the market. It's good to talk to everyone, get introductions, but keep product learning going. Don't underestimate dilution. Self-funded or lightly-funded SaaS can exit for impressive multiples, sometimes matching heavily diluted unicorns. Billion dollar funded exits are for the already rich, not the founders. Choosing between that or a 50-200M exit where its 70-90% the founder(s) is pretty staggering. VC cash doesn't guarantee success or hustle. It's pressure, sure, but timing and execution are still king. Self-Funding or smaller rounds early to prove scale can lead to sweeter terms later. Investor rejection isn't a "no" to building. It's a chance to fine-tune and find the right partners. B2B consulting can be paid market research if you play it smart. In B2B software, strong demand might turn clients into both customers and investors. YC's approach is solid - they don't push startups to fundraise if the timing's not right. There's good investors aligned around that (and them) as well as other ways. The key? Balance. VC or self-funded, focus on building something valuable. Don't chug the VC Kool-Aid, but don't be overly sober either. Pick the path that fits your goals, experience, and market opportunity. Sometimes, the untapped demand is there with or without you - might as well go after it. Smaller investment funds coupled with many successful founders coaching (actual help in doing) are worth looking into. One I came across recently was TinySeed. There are others. If you're still not convinced, check out the VC's silent cousins, private equity firms snapping up self-funded startups to grow themselves.
mooreds 2y ago
I actually think bootstrapping can be great because it reduces the number of major constituencies driving the company by 1. If you bootstrap, you have: * company owners * customers * employees If you take on investment, now you have investors in the mix too, and they don't always have the same goals as the others. But they often have a pretty large voice. That said, if you are bootstrapping but not paying employees, that's fraud. If you are bootstrapping and not paying co-founders, well, that's not great. But if co-founders know this going in and have regular milestones that need to be hit, I'm okay with that. It can be a great way to push the business forward without the distraction of fundraising (which is a huge effort).
- deleted 2y ago
  [deleted]
blitzar 2y ago
Sounds like a pretty typical founder.
andrewmcwatters 2y ago
> Guess the same skills that make one successful in corporate america don't translate into starting a real business. Two entirely different worlds.

deleted 2y ago

[deleted]

j45 2y ago

This isn't always true. Tech s tartups are more and more the core form of the business world. Most businesses that are successful in North America in any industry started self-funded. The cost of building software has fallen 10-100x compared to 10-20 years ago. Self-funding can be strategic, especially for experienced founders with industry chops. Waiting for VC green light might waste time you could spend learning the market. It's good to talk to everyone, get introductions, but keep product learning going. Don't underestimate dilution. Self-funded or lightly-funded SaaS can exit for impressive multiples, sometimes matching heavily diluted unicorns. Billion dollar funded exits are for the already rich, not the founders. Choosing between that or a 50-200M exit where its 70-90% the founder(s) is pretty staggering. VC cash doesn't guarantee success or hustle. It's pressure, sure, but timing and execution are still king. Self-Funding or smaller rounds early to prove scale can lead to sweeter terms later. Investor rejection isn't a "no" to building. It's a chance to fine-tune and find the right partners. B2B consulting can be paid market research if you play it smart. In B2B software, strong demand might turn clients into both customers and investors. YC's approach is solid - they don't push startups to fundraise if the timing's not right. There's good investors aligned around that (and them) as well as other ways. The key? Balance. VC or self-funded, focus on building something valuable. Don't chug the VC Kool-Aid, but don't be overly sober either. Pick the path that fits your goals, experience, and market opportunity. Sometimes, the untapped demand is there with or without you - might as well go after it. Smaller investment funds coupled with many successful founders coaching (actual help in doing) are worth looking into. One I came across recently was TinySeed. There are others. If you're still not convinced, check out the VC's silent cousins, private equity firms snapping up self-funded startups to grow themselves.

mooreds 2y ago

I actually think bootstrapping can be great because it reduces the number of major constituencies driving the company by 1. If you bootstrap, you have: * company owners * customers * employees If you take on investment, now you have investors in the mix too, and they don't always have the same goals as the others. But they often have a pretty large voice. That said, if you are bootstrapping but not paying employees, that's fraud. If you are bootstrapping and not paying co-founders, well, that's not great. But if co-founders know this going in and have regular milestones that need to be hit, I'm okay with that. It can be a great way to push the business forward without the distraction of fundraising (which is a huge effort).

deleted 2y ago
[deleted]

blitzar 2y ago

Sounds like a pretty typical founder.

andrewmcwatters 2y ago

> Guess the same skills that make one successful in corporate america don't translate into starting a real business. Two entirely different worlds.