Companies that aren't capital intensive (most software companies) don't need VC funding. I'm the cofounder of Eureka Surveys (eurekasurveys.com). We're based out of Utah, bootstrapped, and have been profitable since our inception. Retaining 100% control of the company has been invaluable to our success - not needing to become a unicorn in X years is a competitive advantage.
Sure, but if they’re systematically subsidizing the growth path of your competitors, giving them a massive advantage, withholding that approval becomes a tougher call.
Isn't the survey space enormously fragmented though? Is there something that prevents a company from spending a billion dollars and wiping out everyone in the space? Are there just too many niches?
that's (imo) the downside to bootstrapping -- you're likely putting a ceiling on the company. There are only a handful of bootstrapped multibillion dollar companies (github, atlassian, patagonia) and even single billion (mailchimp).
Still, that ceiling can be quite high; I know a couple folks doing north of $100m annually that bootstrapped.
I did a vc company; my next one is 100% going to be smaller and bootstrapped if at any way possible. I definitely think it's the way to go for founders and tends to lead to better outcomes.
That said, I don't think most saas -- particularly midmarket or enterprise targeting -- can be bootstrapped. You just require too much engineering (ie eng salaries) in the first couple years to self-fund.
Companies that aren't capital intensive (most software companies) don't need VC funding.
The converse problem is that there are lots of capital intensive companies, and none of them can get VC funding because the VCs are all chasing 18 month unicorns.
Wow - nice work. I'm honestly surprised firms will pay $1 for just a single response and also not gravitate towards a fixed cost survey solution instead.
$1 is actually significantly cheaper than industry average. Most providers charge upwards of $5. We're able to cut costs by connecting you directly to end respondents and cutting out middlemen - our proprietary panel is over 1M respondents large now.
First, just because you made it work, doesn’t mean that applies to everyone. Congrats on your success, but let’s not generalize with one data point.
Second, what about marketing costs? What about a first-mover advantage and staffing up to win that advantage? What if you want to tap into a network (YC, tech stars, etc.)? What if you really value the good feeling of being validated by having a round of financing? What if bu raising capital you get attention that kickstarts your business that otherwise wouldn’t have come?
I don’t catch how a founder sharing success is an old and tiresome argument. Rather, it’s a common path that many founders have had incredible success with. There’s no particular reason to raise money just as there’s no particular reason to bootstrap. Good founders found successful companies using the most appropriate tools.
In this case, you just accused someone successful of an old and tiresome argument. That’s unhelpful at best.
Not making the argument that VC is bad across the board - companies that require a large amount of startup capital (fintech, space, deep tech) wouldn't exist without VC funding.
We've actually grown entirely through word of mouth. 0 ad spend after 2 years. We also happen to be a late entrant to the market. Companies like Swagbucks have been around since 2008.
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Companies that aren't capital intensive (most software companies) don't need VC funding. I'm the cofounder of Eureka Surveys (eurekasurveys.com). We're based out of Utah, bootstrapped, and have been profitable since our inception. Retaining 100% control of the company has been invaluable to our success - not needing to become a unicorn in X years is a competitive advantage.
Nice! Keep that capital with the workers/founders instead of increasing the wealth of greedy VCs.
Let’s not forget that greedy VCs can’t invest in your business without YOUR approval.
Sure, but if they’re systematically subsidizing the growth path of your competitors, giving them a massive advantage, withholding that approval becomes a tougher call.
Which was the action I am applauding them on - the choice not to use VC.
And to our employees!
Isn't the survey space enormously fragmented though? Is there something that prevents a company from spending a billion dollars and wiping out everyone in the space? Are there just too many niches?
Yes, fragmented, but not a big enough market to make it worth it for a large entrant to spend blindly.
that's (imo) the downside to bootstrapping -- you're likely putting a ceiling on the company. There are only a handful of bootstrapped multibillion dollar companies (github, atlassian, patagonia) and even single billion (mailchimp).
Still, that ceiling can be quite high; I know a couple folks doing north of $100m annually that bootstrapped.
Personally, I'm happy building a smaller company.
We're an LLC, so we're allowed to take draws at the end of each year vs. having to wait for a liquidity event (IPO or acquisition).
I did a vc company; my next one is 100% going to be smaller and bootstrapped if at any way possible. I definitely think it's the way to go for founders and tends to lead to better outcomes.
That said, I don't think most saas -- particularly midmarket or enterprise targeting -- can be bootstrapped. You just require too much engineering (ie eng salaries) in the first couple years to self-fund.
Both my cofounder and I are technical and code - helps save a lot on costs!
The converse problem is that there are lots of capital intensive companies, and none of them can get VC funding because the VCs are all chasing 18 month unicorns.
Totally agree, I tried and failed. Kudos for making it! And keep it up!
Thanks!
Wow - nice work. I'm honestly surprised firms will pay $1 for just a single response and also not gravitate towards a fixed cost survey solution instead.
$1 is actually significantly cheaper than industry average. Most providers charge upwards of $5. We're able to cut costs by connecting you directly to end respondents and cutting out middlemen - our proprietary panel is over 1M respondents large now.
This is such an old and tiresome argument.
First, just because you made it work, doesn’t mean that applies to everyone. Congrats on your success, but let’s not generalize with one data point.
Second, what about marketing costs? What about a first-mover advantage and staffing up to win that advantage? What if you want to tap into a network (YC, tech stars, etc.)? What if you really value the good feeling of being validated by having a round of financing? What if bu raising capital you get attention that kickstarts your business that otherwise wouldn’t have come?
I don’t catch how a founder sharing success is an old and tiresome argument. Rather, it’s a common path that many founders have had incredible success with. There’s no particular reason to raise money just as there’s no particular reason to bootstrap. Good founders found successful companies using the most appropriate tools.
In this case, you just accused someone successful of an old and tiresome argument. That’s unhelpful at best.
Not making the argument that VC is bad across the board - companies that require a large amount of startup capital (fintech, space, deep tech) wouldn't exist without VC funding.
We've actually grown entirely through word of mouth. 0 ad spend after 2 years. We also happen to be a late entrant to the market. Companies like Swagbucks have been around since 2008.
Tiresome? It's hardly ever discussed on this site.