

Ask HN: Bootstrapped vs funded startups, what are non-obvious differences? - cavalcade

In terms of culture, pressures, operations, emotional and that kind of things.
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patio11
I just had the opportunity to tour the Valley a few weeks ago and talk to
people. The big totally-did-not-expect-that thing that kept coming up in
conversations: the relationship between co-founders is often intensely
stressful and frequently a source of business failure. I was expecting that
people occasionally had different ideas on directions for the business. Some
of the stories put me in mind of tabloid coverage of Hollywood divorces.

Not sure if that is a funded-startup thing exclusively, as I know at least one
bootstrapped startup with co-founder drama, but adding investors to the mixed
seem to bring a lot of things to a boil.

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hboon
Definitely not limited to funded-startup. I have been either directly involved
or personally seen a couple of bootstrapped startups whose co-founders left
their startup within 1 year due to co-founders not working well together.

I actually thought it's the number 1 killer.

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strebel
We are based in Arizona and bootstrapped. I have made this analogy in the
past: "Arizona company's have to be hearty like a cactus with a 'real
business' built on a sound model to cope with scarcity of resources. SV based
funded companies are as plentiful as spring flowers are here in the desert but
rarely make it through the summer heat"

Silly okay.. but I think it speaks to the culture. No one I know here in
Arizona includes "after our series A" in their plans. A higher valuation seems
to be the end goal for most startups in the Valley, and dramatically alters
the way they do things.

Personally I would dread trying to outrun the burn rate funded companies
operate under as 99% of them have no revenue or not enough to turn a profit.

We are forced to build a 'boring' business that can sustain itself from nearly
day 1, which leads to a different culture entirely. We solve the revenue
equation first, which makes things easier and less stressful in the long run.
My 2 cents and YMMV

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rfurlan
1\. Getting funded can generate a great deal of buzz, which can be very
beneficial. 2\. Having investors means having access to their networks, which
is sometimes worth more than money. 3\. If you bootstrap, every single dollar
you make is yours. Also, every dollar you spend could have been yours to keep.
4\. Without having investors freaking out about their 30x returns you might
not move as fast as you could. 5\. It is nice to have your investors pushing
you outside your comfort zone (to give that talk, make that phone call).

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rzbn
From my understanding, the buzz you get from getting funded and who your
investors are is actually worth more than they money they get. There are lots
of great products getting built but there is no platform to launch them. Your
average founder's network consists of what maybe a few hundred people
consisting of family and friends and most of them non-techy so they wont be
the first to try new things.

While a funded VC has access to the extensive network of influential
investors, thousands of people and buzz from blogs.

