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Comment by sbilstein | Hacker News Reader

Yep....

Bootstrapping is for fools. Virtually no founders out there are pouring their personal savings into their company. The issues with bootstrapping:

1) No one to tell you to give up except your own survival instinct. 2) You've already told yourself to ignore that survival instinct because of the success stories you've heard. 3) Even if your idea is fantastic, there is another group of folks out there who have raised enough money to pay themselves working on the same thing. You are now under-resourced and already losing.

I about 90% regret bootstrapping my first, failed startup. The other 10% I managed to make into a great opportunity to learn a lot and expand my network but I suppose I could have done that much more cheaply.

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Virtually no founders out there are pouring their personal savings into their company.

That definitely isn't true. Tens of thousands of companies are bootstrapped every year. Some go on to be quite successful (Github, GoPro, Apple...).

You won't find all that many bootstrapped business founders posting on HN (it's run by an investment company...) but that doesn't mean they're not out there. Plus, due to the changing landscape of VC investing, most deals require a bit of traction before you even get a Series A. You have to bootstrap before many VCs will talk to you. There's also angel money, family and friends, etc, but getting that while you're pre-revenue is still much harder than proving the business is at least a bit viable first.

Aren’t all those examples “day X profitable” startups? As in startups that had a profitable business model from day 1 and it only took them some share of the market to become profitable after an initial loss (usually operational). GitHub was making money in their very first year.

Many startups these days follow the “never profitable” business model in the hopes of being bailed out by angel investors or IPO.

I’d say it’s definitely possible to bootstrap when your profit grows along with your business. Not possible when you burn money every single day forever.

Was GitHub ever profitable?

Take those assumptions and spend a year burning your savings. Once you see that all your competitors raised at least a few hundred k pre-product while you’ve got a hole burning in your pocket, you’ll feel like an idiot.

If you run an already profitable business like a services company, you can get away with bootstrapping. But then it’s not really bootstrapping, it’s a pivot.

We've been bootstrapping our weird tech/bio/techbio startup for the last four years... it's NOT EASY at all, but we've made it to the point that we're ramen profitable (For now) and it's kind of an amazing feeling.

Of course I'm making like 1/5 I would at a tech company, but we're literally saving people's lives, and that really makes up for not making as much.

Kudos to you! In that time did you ever feel that you were being unfairly compared to certain unicorn startups as you were becoming profitable?

How does the reach of FAANG and their financial clout make it difficult when you're hiring devs?

You may not want to hear this but four years is way too long to reach ramen profitability and it’s not a good signal for future success of that startup.

Could you please state a source or elaborate your reasoning? That is a very bold claim, especially since biotech in particular has quite high costs. Note also that the objectives may be different (e.g. save more lives, versus maximize profits early).

> Bootstrapping is fools. Virtually no founders out there are pouring their personal savings into their company

This conflates people who haven't raised external funding and people who actively put money into a startup. It is possible to bootstrap a startup without plowing money into the business.

It's true that bootstrapped founders are plowing time into their business, but this is true of funded founders as well. VC money may pay a handsome salary, but taking it often means that you have to vest shares that you would otherwise own outright.

I would be willing to bet a large amount of money that the large majority of successful businesses are either bootstrapped or use traditional loans as funding. The stats don't work out any other way - several hundred thousand new businesses are started in the US each year, but only a fraction that number could possibly be angel or VC funded. Your perspective only applies to a narrow slice of SaaS businesses.

I suppose when I read Hacker News, I think about the kind of companies that would apply to YC or otherwise compete with SV-ish funded companies.

That's the thing with business advice. You can give advice with good intentions but there is almost certainly someone out there who took the opposite of said advice and became successful.

Bootstrap or don't bootstrap. You can be successful either way but it's the nuances, timing, context, chance, etc. that matter.

Yes - if you can raise money then do it. Why not? But do not gave up if you cannot.

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