Ask HN: Any founders who self funded all the way? How was it?
We are actually considering going completely bootstrapped from idea to profitability. Is this insanity?
I have done both, there are pros and cons to each side and both bring different headaches. My personal preference is not to raise money, but I am not against raising money either -- I am part of a startup now that raised.
A lot of the exceptions and premise of this depends on your idea and some ability to fund it until revenue comes in. Many times, you can use your day job to fund the business for now, get some traction, get some clients and work the angle to find what will sell. VC's will call people who do this non-committed and/or hobby/lifestyle businesses. There is truth to what they say of course, but in the end their point of view is also very self serving.
If I told you that you can build a $10-20M/year business with 10-30% margins in 5-8 years, owning 100% of it (or close to 100%) and enjoy life, would you be complaining? No most people would jump at that, and the people that don't are usually the outliers. Even wealthy people want to own these types of businesses because those businesses produce real returns consistently. But a VC would call this a lifestyle business because it isn't going to return to them the high value they need to justify investing -- which in all honesty is a fair position.
There are also alternatives to the VC highway of funding. High net worth individuals live all over the US and world, and almost all are interested in making decent investments with reasonable returns. Most small businesses that take funding in the US are backed by these people more than any other source (outside of family, friends). And the ownership these people take is fair given their risk/reward ratio.
There are also reasons to jump on the VC train but I have already written a book and I am sure others will point out those values.
I self funded my solo developer lifestyle business and am really happy about it.
I'd rather run a business that's profitable from nearly the start and eventually ramp up into something that's very reasonable, instead of beg for money and hope that in 5 years I get bought out by Acme Inc for an absurd amount of money that needs to get split up in a 100 different ways.
http://www.thejournal.ie/plenty-of-fish-sold-2217455-Jul2015...