Bootstrapped, Profitable and Proud

Going from $0 to a $750m valuation still counts as bootstrapping, even though "not taking VC" is no longer technically true.

Incidentally, there's not necessarily anything to be "proud" of if you don't take VC. It depends on the details of the business. 37signals has done fine without taking VC (though they did take a personal investment from Jeff Bezos), but Google, Amazon, Facebook, and the like would never have been successful without substantial outside investment.

The article about us was written in March of 2011, before we accepted funding. We were bootstrapped for 4 years.

That's an interesting distinction. I'm not sure enough information is available in most cases to tell. Without knowing the personal finances of the founders, it's hard to say if bootstrapping means they started with $0, $10k, $100k, $500k, $1m, or $10m in the bank. The implication is often that it's closer to the low end of that list, but people who start companies after doing something else for some years often have a substantial cash pile they can use to self-fund. Especially true when people bootstrap a 2nd company after exiting the first; then it can be closer to angel-investing in your own startup.

> Are all of these bootstrapped, or are some of them self-funded?

HN doesn't seem to make the distinction, for self-funding of less than $100K.

The thing I find particularly fatuous: "We were bootstrapped until we took VC money", as if everyone who takes VC money isn't in the same camp. I guess the company I founded was bootstrapped until our A round valued at $40M. Hey I created a $40M company by bootstrapping!

I would call it "Soft Bootstrapping". It is a very important distinction to make.

I used to work for a company which was growing like crazy and were signing customers left and right. The company hadn't taken any external investment. I was amazed at their "perceived" organic growth rate and very proud of working there. Then, the bubble popped. One day, I found out that one of the founders who actually plugging in the difference every month from his own pocket. Frankly, I was little disappointed.

I think its important to take into account the financial positions of the founders or their investments in their own companies.

Not until way after they were profitable. And they took him on as an adviser more or less, they didn't need the cash. Tell if me Jeff Bezos said he wanted to buy a part of your company (which gave you some access to him) you would say no??!

Bootstrapping means that you created your company without taking in any outside investors (from the idiom pull yourself up by your bootstraps). VC means you took venture capital money.

A successful bootstraped company generally starts smaller and grows slower than a successful vc-funded company but the founders get to keep all of the ownership. With the advent of cloud computing its getting cheaper and cheaper to bootstrap and it's making bootstrapping much more of a viable and attractive option.

VCs take a stake in the company and drive the priority towards serious growth. VCs don't want your company to grow sensibly and return their money, they want it to have massive growth or fail.

Bootstapping lets you run your own company along your own lines, you firmly remain in charge.

It's often summed up as to what drives your creation of the startup: being "Rich or King".

Taking VC means you need to look for an out. In my mind that's the biggest difference. They don't want to invest in a company to take a portion of profit, they want you to sell your company or go public so they can cash out.

Also, when a company exits, a bootstrapped founder might make more money than a VC-backed founder.