Ask HN: Re: 37 Signals - List of successfully bootstrapped tech startups?

[replicatorblog]

I'm guessing the 8+ submissions of the 37 Signals/Twitter satire were killed due to fatigue. It makes sense, the argument surrounding the VC vs. bootstrap model in the context of the Mint buyout generated 300+ comments, often heated.

Instead of rehashing the same arguments can we look at this empirically?

lets create a list of successful (defined by exit or long term profitability) tech start ups that haven't taken VC. Then we can compare it to the portfolios from the top 5-10 VC's. It won't conclude anything, but at least we can argue facts instead of opinions.

I'll gladly put together a comparison site if we can generate enough names:

Successful tech start ups that haven't taken VC:

1. Craigslist.org

2. PlentyOfFish.com

3. MyBlogLog.com

4. ClubPenguin.com (angel)

5. Threadless.com (took on a small amount of expansion capital, but was profitable before hand)

Others?

[replicatorblog]

Dell/Microsoft

(http://www.entrepreneur.com/magazine/entrepreneursstartupsma...)

[replicatorblog → replicatorblog]

I tend to agree. No one objects to the idea of bootstrapping, but 37 Signals seems to treat it like a moral failing if you don't. I'd be thrilled to learn that you can regularly scale companies to IPO, 9 digit acquisition, or prolonged/growth profitability without VC. I just can't think of too many.

[billclerico → replicatorblog]

does anyone know about microsoft's early funding? was it VC at all?

[bkbleikamp → billclerico]

Bill Gates had a trust fund because he had rich parents and grandparents. I don't know if he used any of it to fund the company, but he didn't need VC to buy groceries.

[callmeed]

I'm wondering if someone could use the CrunchBase API to do such a comparison–grouping companies by if they have any investments or not (assuming the data is accurate, of course). http://crunchbase.com/help/api

[vyrotek → callmeed]

I've looked through these companies many times and never noticed the Bootstrap category until now. Thought I would point it out - http://crunchbase.com/companies?q=bootstrapped

[replicatorblog → callmeed]

Thats a really good idea. Unfortunately, a lot of companies don't have any funding data listed so it might make it tough. I wonder if there would be any way to comb regulatory filings?

[tjogin]

I don't remember 37signals claiming you'll hit the jackpot with their proposed model either. Their entire argument can be summed up as "forget the freaking jackpot!"

Hoping to win the lottery is not a good way to make money. Instead, you should just build a profitable business that you can live very comfortably from. That's hard too, but it's a lot more feasible than winning the lottery.

And by winning the lottery, I mean getting an exit of a ridiculous amount of money, whether you were VC funded or not.

[callmeed]

iStockPhoto

Acquired for $50MM by Getty Images. Projected revenue of $200MM this year.

No VC funding that I'm aware of.

[pclark]

SAS Institute is the worlds largest privately owned software company. $3Bn revenue last year.

There are probably literally dozens with revenue in the tens of millions of dollars though. All the ones you listed are B2C, there'll be tons of very successful B2B service providers.

Two local [to me, Cambridge UK] ones spring to mind: Jagex and Red Gate Software both employee 150+...

[replicatorblog → pclark]

For sure, thanks for the names. I don't doubt that there are lots of great mid sized companies with large teams and revenue streams. I just get frustrated when 37S talks up their process and doesn't mention others that are doing likewise. I wouldn't be surprised if the bootstrapped companies were better deals overall for the founders, you just don't hear about them nearly as much as the vc backed ones.

[jaxn → replicatorblog]

With a VC you get a rolodex, which includes press contacts. Maybe there is something to that whole "you hear more about VC backed companies" thing.

[christonog]

Though probably not a start-up anymore, I don't think Zoho has taken any VC money.

[replicatorblog → christonog]

Great call, I forgot about them. You are right, they just mentioned how they had no investors as it related to Zimbra's unpredictable future.

[replicatorblog]

IIRC Kerpoof was acquired by Disney pre-funding (http://www.crunchbase.com/company/kerpoof)

[pclark]

its probably backwards to look for exits in private companies. Usually the founders are 110% committed to building a long term company, and strive to ensure they own the majority of the company so they aren't told what to do.

[pclark]

none get large without VC.

[pjhyett → pclark]

What's your definition of large?

[replicatorblog → pjhyett]

Lets say over 200 people or $25MM in revenue as a first filter. Seems like a relatively low barrier. A more conventional definition might be 1,000 people or $100,000,000.

[borism → replicatorblog]

none of whom?

clearly there are some

[borism]

"I'm guessing the 8+ submissions of the 37 Signals/Twitter satire were killed due to fatigue."

interesting. I guess VCs don't like it when they're not needed?

[replicatorblog → borism]

Borism,

I was thinking more the moderators were tired of running through flamey threads that amounted to "VC is the only way to build a REAL company" "Nah man, VC's suck! Bootstrap 4 eva!"