Ask HN: Startups with a goal of absolutely no VC? | Hacker News Reader

Ask HN: Startups with a goal of absolutely no VC?

7 pointsbgnm20007 comments

For a long time I always felt like one of my goals was to start a business that I could raise some VC for and then grow into something enormous.. I can admit, that I'm a 37s fanboy, and over time have grown to loathe the idea of raising VC.

I'm working on something right now, that I think could be pretty big - but I'm much more concerned with creating an amazing product, growing slowly, having it cover its own costs, and becoming profitable as soon as possible - rather than even consider raising VC.

Just wondering what percentage of HNers are on the same page with me when it comes to starting a business, or are on the other side of things looking to raise capital?

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A few years ago I was reading "Growing a Business" by Paul Hawken[1], in which he shares his experiences in entrepreneurship (which are quite dated, but interesting). One thing that stuck out to me was that in his first business, he used $1000 to get up and started, and in the latest one at the time of writing, had used over $100,000. He said in the first he would have felt uncomfortable with more than a grand in the first experience and uncomfortable with less than a hundred grand in the last example.

I took away the point that the amount of funding needed to start a business is variable, and so are the needs of the founders. Founders shouldn't deal with more or less than they are comfortable with. Personally, I lean more in the direction you do, wanting a business to be cash flow positive before I took any outside capital. But that would be extremely difficult in many situations, and limiting yourself to having a product that is very small profitable now may limit your ability to build a product that is hugely profitable in the future. My thinking is that a founder needs to take time and evaluate carefully whether they should seek investment or bootstrap.

[1] http://www.amazon.com/Growing-Business-Paul-Hawken/dp/067167...

I agree with everything you've said, but want to add that for new entrepreneurs, it's wise to start your earlier ventures with the minimal amount of money and grass-roots types of efforts. From this, you grow to understand your strengths and weaknesses. A good entrepreneur may not learn great marketing techniques as a result of doing self-marketing, but may learn that he is not a good marketeer, which is just as valuable.

Serial entrepreneurs like to start with more money because, in part, I think they already know what types of endeavors it makes sense to pay somebody else to do.

Having a goal of not raising capital seems like a silly goal to state. I think you better addressed it in your actual post:

"concerned with creating an amazing product, growing slowly, having it cover its own costs, and becoming profitable as soon as possible "

I took amazing product and becoming profitable (same as covering costs, no?) as self explanatory and not needing explanation. However, growing slowly needs a reason in my mind. There may be some justification, but you haven't stated why. I also don't like limiting ones options for arbitrary reasons, you might need a big pile of cash to take your product to the next level despite being profitable. VC could really important at that point because the opportunity might be time sensitive.

I see it similarly--not really looking for VC investment. I don't really focus on 37S; my goal to create a product that has sufficient value that people/users (at least some) will pay for it. Short-term, of course, it's more challenging to bootstrap, but in addition to coding, I've thought through a fairly solid revenue model. We'll see what happens.

Raising capital isn't like dusting crops, fanboy :-)

Given this venue, there are a lot of VC minded developers. Going that route isn't a requirement to being successful. Ive started several companies without taking any outside money, and most of my clients are the same. No matter which way you go though, if you try to do everything yourself you are more likely than not to end up with a failure. Find one or two others who share your vision, who also bring critical skills to the table.

Sometimes it is not about the money, but more about exposure, mentorship, and helping you execute your idea better. 37s did the same with Bezos...

Not interested in raising any VC. I've been part of a startup dealing with VC's and had a second startup fail to get the required VC investment. In both experiences, it was not fun.

Its far better create a product and grow the business. I also like owning the whole business and calling the shots. I'll take a 50% chance at a moderate success over a 1% chance at a huge success.

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