
Bootstrapped, Profitable and Proud - brainless
http://37signals.com/bootstrapped
======
jyap
It was at one time a good example but Andreessen Horowitz invested $100
million into Github one year ago.

[http://peter.a16z.com/2012/07/09/software-eats-software-
deve...](http://peter.a16z.com/2012/07/09/software-eats-software-development/)

~~~
mhartl
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.

~~~
lifeisstillgood
Hold on - what!?

Jeff Bezos invested in them and they are claiming they are bootstrapped? And
have not taken VC money?

How can either of those be true. (And Bezos was not a VC fund is just playing
semantics)

~~~
eloisant
Taking VC money when your company is already successful makes a huge
difference. If you already have a decent valuation, you can raise money while
keeping a majority stake.

The difference is:

* Taking VC money from day 1 and have a founder with a 10% stake

* Taking VC money when the company is already successful and highly valuated, so it can raises millions while the founder retains 70% of the capital

That's day and night. In the first case the VCs decide, and they can fire the
founder if they don't like it.

In the second case, the founder controls the company and can tell the VC
"thank you for your advice but I'm doing it my way" during board meetings.

~~~
lifeisstillgood
But ... Their talk and brand and story is "doing it our way, in Chicago, away
from all that Silicon Valley VC nonsense"

I'm not disagreeing with their choices (if Bezos offers to in est you say yes)
but it does rather dim their core story.

That's fine - this is all part and parcel of HN - the real "how we got there"
is always more educational for those following than the story told afterwards

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davidw
Cool to see FlightAware there. Their system runs on mod_rivet:
[http://tcl.apache.org/rivet/](http://tcl.apache.org/rivet/) which I helped to
develop. Karl is a nice guy, too.

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hko
Braintree is not a great example of a company that "didn't take VC." According
to Crunchbase they raised a $34 million series A round and a $35 million
series B round. BigCommerce also raised a $15 million series A round and a $20
million series B round.

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

~~~
ryan-allen
Yes, correct, people keep making this mistake. 37s only accidentally featured
Shopify who took seed money, but they corrected it and removed them from the
roll once it was pointed out.

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clamprecht
Are all of these bootstrapped, or are some of them self-funded? If I start a
company, and invest $300k of my own cash, is this bootstrapped or self-funded?

~~~
hpagey
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.

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toptal
Here at Toptal we were boot strapped for more than a year before taking any
money from a16z and others. It not only helps funding, it also helps the core
of your company run at a fundamental level; seeing every operation through the
lens of profit vs. loss which most (purely) funded VC companies don't grasp
very well at all. It's extremely important.

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gadders
Unlike 37 Signals, which took investment from Jeff Bezos.

~~~
ryan-allen
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??!

~~~
gadders
I would say yes in a heartbeat. Would I then make such a noise about being
bootstrapped and profitable? Not so sure. Pretty certain I would add a * with
an explanation every time I mentioned bootstrapping.

But is your version of events correct? I've never seen the story myself on a
37Signals post.

~~~
mike
[http://37signals.com/svn/archives2/bezos_expeditions_invests...](http://37signals.com/svn/archives2/bezos_expeditions_invests_in_37signals.php)

~~~
gadders
Yeah, just found it. Understandable, but I guess my comments about caveats
still stand.

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ksec
I wish HN would mandate all submission to have [years] behind it. This is from
2010!

Github was invested $100M as many would have known. Asmallorange has been sold
to Endurance Group.

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maaaats
What's the difference between bootstrapping and VC, and why does it matter?
(Curious, I know little about these things)

~~~
cmdkeen
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".

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ryan-allen
There's a picture of me in one of those photos, yay!

