Hacker News Reader

Comment by b20000 | Hacker News Reader

b20000

i bootstrapped a hw business and looking back i regret it. i thought i could raise at a better valuation later, and trusted this logic after reading about it on hackernews years ago. however what i found is that the investors i pitched once i had customers, were no longer interested because they thought the traction was too small, and they did not take into account the miniscule capital it took to get there and the impressive effort delivered. so once you have revenue that will be used as a reference. if that revenue is not astronomically large then chances are you can no longer raise and you are stuck without funding to market and sell or hire. to date i have been unable to find a solution to this problem. acquiring customers is not free. curious to hear other similar stories and potential hacks to this problem.

View on HN

I suspect your best bet is to reframe your solution if the technology or market need can present a gap on a chart, as a whole new startup

e.g.

"b20000s app/standanrd $industry app": 60% success b40000: Shiny and Fancy. With AIMLGPT machines. And all. 80% success"

Basically you are probably lacking urgency and humans tend to rest a lot of assumptions on some urgency, especially for business.

At least don't start by introducing the existing business. At best say you've spent x years as a CEO/CTO etc, and pull your experience in to answer questions, as well as clarify the situation if needed.

I have never raised money (at least not so far) but as far as I have understood, investors don't care about the fact that you were able to acquire traction using miniscule capital. They care that you grew fast and there is a billion dollar market.

If your argument is that you grew slow bootstrapped but can replicate that 10x or 100x just by VC money, investors don't take that as a sign of strength or possible future success.

You can bootstrap but you need to show high traction to raise money from investors. Bootstrap or not.

>> acquiring customers is not free

No it is not and you are right. In the fossil days of startups (1985 - 1995) you bootstrapped or literally built the first solution for a customer who is desperate for the solution. Oracle was launched like that. Larry was a contractor who built software for the CIA. One day Larry writes an RDBMS as defined by Stonebreaker. CIA wants information not software systems. Larry asks "can I go sell this to others, I know you paid for it all". They are like - for sure! Go for it!

After that it's pure conjecture. I think he secretly teamed up with Chuck Norris to form a late 80's Japanese Aesthetics and Cultural Appreciation group. After that he pipped Oprah to the post by giving away cars to people but I think for entireley the wrong reasons.

WebTV was launched on a $5000 cheque from a colleague. Sold 18 months later or something silly for $400m to Microsoft. Oh I will never forget the smile on Steve Perlman's face that day, lol.

But before I get lost in a Raymond Reddington anecdote -> Reframe the low revenue as "We could have had ten times that number of customer if you had funded the inefficiency in the market place and let us own it." It's kind of what Elon Musk did when ALL of his investors wanted to bury him and what they saw as a fast rising embrassment of what was Tesla. At that meeting he pretty much said "fuck it, I'l fund it and take all the upside myself." Next thing you know...no one wants to be that investor who said no.

Reply on news.ycombinator.com