
Why This AdTech Startup Turned Down Seed Funding - alexsherman
http://www.forbes.com/sites/hollieslade/2014/03/21/why-this-adtech-startup-turned-down-seed-funding/
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ChuckMcM
_" “Whenever you bootstrap a business revenue becomes that much more
important,” says Sherman. “You become very business model focused, very
sensitive to cost structures and it really does force you into a kind of
diligence with regards to financial performance and managing your costs.”"_

That is the key, staying focused. Seed or no seed round it doesn't matter, if
you raise too much it is very common to lose focus. I once explained it so
someone that its like going into the grocery store with a limited amount of
money to buy enough groceries for the week, and going into a grocery with
enough money to buy everything in the store. The first person gets in, gets
what they need, optimizes for cost effectiveness and gets out. The other
person wanders the aisles imagining all of the different meals they _could_
make, without actually deciding on a single meal _to_ make.

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drakaal
There is no reason taking seed precludes you from putting your own skin in the
game. Nor does taking seed force you to not do things your way. This doesn't
read like they had a choice, because their reasons don't align with why you
wouldn't take seed.

Typically the companies that say "we are doing this bootstrapped" rather than
taking seed, are companies that don't need money to get started, they need dev
time, or they can start profiting form labor/sales right away.

You want to boot strap a HomeJoy for Llama sheering? You can buy $100 worth of
software, $10 a month in hosting, $300 in graphic design, and be up and
running. You'd only take money to get advertising. Why give up 25% of the
company for that.

You want to build the first software capable of predicting NFL games, all you
need is dev time, so you keep a part time job and code while you ignore your
family and girl friend. No need to give up 25% for money so you can get it out
3 months earlier because you don't have competition.

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freshhawk
Their reasons made very good sense to me. I read their comments less as
statements of precluding or forcing and more about incentives and focus.

I'm a big fan of the "tie yourself to the mast" (Odysseus and the Sirens
reference) approach to managing yourself or your team. Many times the strategy
of intelligently removing future options for yourself in order to eliminate
distractions and temptations pays off very well. You've removed a path that
you can see may be taken in moments of weakness.

The business plan you develop because you _need_ it will be better than the
one you develop because you know you should have one.

If you see people as Galts or Ubermensch or some kind of rational actor then
this seems crazy to you. Why limit your choices when you can remain flexible
in the face of an uncertain future?

If you acknowledge that you yourself are subject to coercion by incentives,
that willpower is a depleteable personal resource, that paradox of choice type
situations carry a cost? Then it makes a lot of sense.

Of course, as you pointed out, there are a lot of projects where this choice
simply doesn't apply.

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binarytrees
My friends company did the same thing. Probably the best way if you can, he
does very well in ad-tech.

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Edmond
best logo I have seen in a while :)

