With all the talk of massive amounts of cash sloshing around the web/mobile startup ecosystem (including things I've said recently), you would think that nobody bootstraps anymore. But that is not true at all.

Last week my partner Albert blogged about our most recent investment in Behance. Behance was bootstrapped for its first five years. As Scott Belsky, Behance's founder and CEO, wrote on the Behance blog:

For the past five years, Behance has been a bootstrapped enterprise. We’ve sold Action Pads, books, job postings, conference tickets, and even banner ads (horror!) to generate the income to build Behance. It’s been amazing, and we’ve developed as a team and company in extraordinary ways.

Behance isn't the only recent USV portfolio company to bootstrap its way into our portfolio. Wattpad launched in 2006 and bootstrapped for five years before we invested.

Gabe at DuckDuckGo launched in the fall of 2008, and bootstrapped for three years, working by himself to build DDG, before we invested.

Stack Overflow also launched in the fall of 2008. Joel Spolsky, Jeff Atwood, and the Stack team worked on the project without outside funding for several years before USV invested.

Dwolla launched in the 2010 and operated in bootstrap mode for eighteen months before we invested earlier this year.

Three of the six portfolio companies in our new fund, raised late last year, were bootstrapped for an average of 3 1/2 years before we invested. And at least half of the most recent twenty investments we have made were bootstrapped for well more than a year, and often for a lot longer, before we made our initital investment.

None of this is to suggest that going the accelerator, seed, angel, or some other more fashionable route is a bad idea. They all work just fine. And we are investing in plenty of companies that choose that route. But for some reason our firm is drawn to the bootstrapped model, and increasingly so.

#VC & Technology#Web/Tech

Comments (Archived):

  1. Julien

    Boostraping is the slow-food equivalent of the tech industry!

    1. fredwilson

      Yes indeed



  2. RichardF

    Bootstrapping teaches you to be be disciplined with your time and money. With the added advantage that you are not wasting time pitching to investors.I do wonder with so much money sloshing around and so many people looking to launch the next big thing if you are at somewhat of a disadvantage if you bootstrap for too long.It seems to me (but I don’t have any figures to back it up) like there are more people in stealth mode/flying under the radar at the moment.

    1. awaldstein

      Sometimes you just need capital to push it forward. With infrastructure, with feet-on-the-street to close partners, with full time community support. “There’s a mid way between all out and not.

  3. Rohan

    Cue: A passionate rant from a certain friend who is going to be in his elements – ending with….9/11 was an inside job

    1. fredwilson

      A certain friend – nice!

      1. Rohan

        I pop in and realize I’m downvoted for the 2nd time in the past week.Popularity issues! πŸ™‚

        1. ShanaC

          I like you

          1. Rohan

            Aww. It’s mutual. πŸ™‚

          2. Kasi Viswanathan Agilandam

            I am not seeing the up vote on shana’s comment…. you liar πŸ™‚

          3. John Revay

            I “Like” Rohan as well +1

        2. Kasi Viswanathan Agilandam

          up vote and down vote are the same…. should not impact what you want to say … say what you wish to say and never care about ups and downs.There are people who hate Apple … does that matter ?

          1. Rohan

            I find myself agreeing with you on that.. and yet, disagreeing with small parts.Agree with you that it doesn’t change what you have to say.Disagree that feedback doesn’t matter. It’s helpful if there’s a fair rationale behind it.. Steve Jobs did have to deal with the antenna issue on the iPhone4 for instance. :)I noticed JLM’s comment yesterday was downvoted. Would be interesting to see if that would have happened if the identity of the downvotes was revealed..

          2. Kasi Viswanathan Agilandam

            Feedback do does matters… in words … not by voting anonymously.



  4. Matthias Henze

    Do you think that it’s a big hazzle for the founders/mgmt-team to adopt from being in bootstrapped-mode to change to having investors and thus having the ability/expectation to being more aggressive?

  5. jkaljundi

    Especially in Europe you see bootstrapping or building businesses like our fathers did, with no external investment, much more.

  6. Michael Elling

    You are buying into a better management team if they can work together through all the challenges of bootstrapping. There’s more value for them and you.

  7. Fernando Gutierrez

    And I guess that if you invest after a few years the terms for the founders are much better because they already have something that works, isn’t it?

    1. fredwilson

      less dilution is one of the many advantages

  8. LIAD

    No revolution ever started on a full stomach.Bootstrapping brings to the fore the most important elements of company building. Passion, dedication, focus and vision.All startups should be forced to go through a mandatory bootstrapping period to help forge the founders and early team.Bootstrapping credentials should be seen as a far more prestigious badge of honour than closing top tier VC.

    1. RichardF

      top comment

      1. reece

        “No revolution ever started on a full stomach.”love that line

        1. LIAD

          first heard it from JLM. He’s a badass.

          1. RichardF

            well…except maybe for “Jamie Oliver’s Food Revolution”Edit reply was for @reecepacheo (disqus fu)

          2. RichardF

            double post, Disqus error, deleted

          3. reece

            ahhh… I knew it sounded familiarand indeed, he is

          4. FAKE GRIMLOCK


          5. falicon

            Most powerful need is actually LOVE. Many have happily died for it, and I suspect many will happily die for it in the future…

          6. FAKE GRIMLOCK


          7. falicon

            I’m talking about love on a deeper level than just hugs…think about ideals on the Bravehart level…I think that’s the level of passion/love you’ve got to come at a startup with if you really want to successfully bootstrap it. ‘STAY ALIVE’ is by product of that passion/love

          8. FAKE GRIMLOCK


          9. Dave W Baldwin

            @FakeGrimlock:disqus is right re Braveheart/HungerCrowd, but it still comes down to a team of the fewer who know what they’re doing will get the job done… and probably Bootstrapping.

          10. falicon

            Number of stupid people, bad decisions, and mistakes also far out weighs the number of genius, brilliant choices, and planned successes…

          11. Ryan Frew

            Grim, I think that proves @falicon:disqus ‘s point even more than your own. Revolutions are started on empty stomachs but totally full hearts. There have been plenty of revolutions started by full bellies. There has never been a revolution started by an empty heart.

          12. FAKE GRIMLOCK


          13. Ryan Frew

            I love this comment. Although I’ll add that perhaps revolution happens when love is motivating a group of people. The recent revolution in Egypt was fueled by an enormous group of people who loved their country. And those people were hungry for change. So maybe both ingredients are required.

          14. JamesHRH

            Maselow’s hierarchy of need: survival, belonging, being.GRIM is right.

          15. falicon

            There are things I would choose over my personal survival…actually I suspect/hope there are things that most people would (if I have to pick between myself and one of my kids, without hesitation I pick my kid to survive)….’survive above all else’ is not an absolute truth is all I’m saying.

          16. RichardF

            tru dat

          17. fredwilson

            that he is

    2. jason wright

      An army marches on its stomach. Keep it well fed and it will win out, hopefully.

    3. Kasi Viswanathan Agilandam

      “All startups” … can we change that to “All internet startups or software start-up”?There are other industries exists which require money early ON…with just ideas. A good example is Pharma …

      1. LIAD

        I think all startups benefit from the focus, discipline and team-building which bootstrapping invariably brings about. Perhaps even more so those in industries which necessitate high upfront cash burn.

        1. Pete Griffiths

          How do you bootstrap a biotech company with high upfront cash burn?

          1. Chris Johnson

            Start as a consulting firm serving biotech companies. Do projects as a team.

          2. Pete Griffiths

            My experience has been that it is extremely difficult to migrate from a service business to a product business. Not impossible, but very hard. The key problem is that the opportunity cost of key employees forgoing consulting revenues to spend time of product means that the apparent cost of product development is very high.

      2. carel van apeldoorn

        it’s not about how much money you raise, but it’s all about how you spend it.

    4. Matt A. Myers

      It seems our thinking is aligned! I may have to steal this to include in a longer blog post I’m going to right. :)Here’s my deeper analysis / comment I posted a few minutes ago, 100% aligned with what you said –

      1. Matt A. Myers

        A downvote? Really? Come on now. Go fuck yourself to whoever’s anonymously downvoting it instead of giving constructive criticism.

        1. Rohan

          Restored parity. πŸ™‚

          1. Matt A. Myers

            For you, much love.

        2. William Mougayar

          I just upvoted you…this is one of the flaws in the up/down voting i think.

          1. Dale Allyn

            I agree, William. Up-vote added to Matthew’s comment… (twice)

        3. Matt A. Myers

          @rrohan189:disqus @wmoug:disqus @daleallyn:disqus Thanks guys. Apparently the parent comment, when re-visiting this page (grabbing a comment link for a blog post), shows the comment hidden due to enough downvotes – I guess regardless of the amount of upvotes, seeing as it shows “1 votes”



    6. baba12

      Wonder if you would like to say bootstrapping is ok for a software service startup. Any other industry in the hi-tech area requires initial capital that is way outside someones’s capacity unless they have made shit loads of money elsewhere.Elon Musk could bootstrap tesla as he had made a shit load from his paypal venture, which was a software service.Most VC’s don’t have the capacity to accept the risk that certain sectors of the economy require in terms of capital requirements.I am guessing Mr.Wilson and you are specifically talking primarily about bootstrapping as a means in the software as a service industry, even in that industry 10-15 years back one could not do with bootstrapping.

    7. fredwilson

      i love the opening line to your comment LIAD. i love the whole comment actually

    8. Chris Johnson

      Bootstrapping credentials should be seen as a far more prestigious badge of honour than closing top tier VC.Amen. 100x

    9. Esayas Gebremedhin

      I think accelerators and incubators are the first attempt to turn digital entrepreneurship in a systematic framework. The problem is that original ideas are unpredictable and some experiences in the past may not be applicable in the future. Bootstrapping leaves more room for experiments and unpredictability. For example I have this vision that we can eliminate the majority of advertising but framework-thinkers do suggest me advertising as a monetization strategy.

  9. Mark Mc Laughlin

    Fred. In terms of investing is it more attractive for USV to invest in a boot strapped start up that has got to cash flow break even or a start up losing money but going for growth or does it just depend on the company?

    1. fredwilson

      going for growth is best.

  10. Joe Yevoli

    Nothing better than a company willing to grind, and persevere while they figure things out…

  11. Roger Ellman

    Happily bootstrapping on several fronts – of course I look forward to meeting one day when the moment is right and the boots fully strapped up, so to speak!

  12. Giddy

    Most of these companies must have raised some funding – even from local smaller time angels. How do you define bootstrapping? Raising less than $1m?

    1. fredwilson

      Allen from Wattpad stopped by to correct my assertion that he bootstrapped for five years. it was only three. but other than that i don’t they did.

  13. reece

    definitely been there… 3 years of bootstrapping notched in my belt…i even picked up and to make a side project out of iti wanted the full word, but couldn’t afford the vowels πŸ˜‰

    1. JLM

      As Vanna White well knows, you gotta pay up for the vowels, my friend..

    2. ShanaC

      some days I think we’re going to run out of awesome domains….

      1. Matt A. Myers

        They’re already much less relevant than they used to be visa vie app stores as discovery points. It’s helpful to have the domain name of your company though..

        1. LE

          I would not say they are less relevant. But I find that as younger people get involved in startups they are definitely not aware of proper naming. They see limited examples of success stories where the name didn’t matter and draw conclusions that they can follow the same strategy and it will have nominal effect on their success.Names do matter and are relevant in the majority of cases.App stores and alternative discovery methods are not the way the majority of Internet users use the internet.

          1. Ryan Frew

            But what’s important in a name? Frankly, I think catchiness is more important than its ability to describe the company’s services. Not many people know the meaning behind Google, Nike, Microsoft, Twitter, Motorola, or a huge collection of other very successful company titles. Apple is probably the worst name of them all, and we can all agree that they’re doing alright in spite of it.

    3. fredwilson

      boottending – bootstrapping by bartending

      1. reece

        hahah… that domain may be available. let me check…

        1. fredwilson

          or barstrapping!!

          1. reece

            boottending and barstrapping are both available, but i think i could run them as subdomains of btstrppd ie. πŸ˜‰

  14. Tom Labus

    Just how much do you believe and what are you willing to do to make it happen.I’d say this route is the norm for most companies.And, besides this time frame always makes for great war stories. Good to tell after the fact.

  15. markslater

    its an important part of the start up DNA. it teaches so many lessons. i know.

  16. Capitalistic

    Awesome. I’m bootstrapping my current mobile company. Focusing on how to generate sustainable or “clear” revenue at 40% GP. After 12 months, we’ve settled on a clear b/model. We might bootstrap all the way!I think a lot of “unknown” companies bootstrap for 2-3 years before entertaining new capital.

  17. johnmccarthy

    “We’ve sold Action Pads, books, job postings, conference tickets, and even banner ads (horror!) to generate the income to build Behance.”Proving that one doesn’t need to (and usually shouldn’t) rely on a single revenue stream early on to build a business, which some VCs (and consultants) might push for. Scott and his team have done a great job of building out a brand identity across a number of related product lines. What is common is that they all fit together under the common theme of helping creative individuals get stuff done. This will be a great investment for USV.

    1. fredwilson

      thanks John

  18. David Repas

    That’s interesting. I’m sure that there are quite a few reasons for that, such as market timing and the stage that you tend to invest in. But it will be interesting to see if this trend continues for USV in 3-5 years. Note for future blog post :o)Of course, I like to think that bootstrapping and being able to execute at the same time says a lot about an entrepreneur (persistence) and the culture that they are creating. As wonderful as it is to see so many companies getting started, it does make you wonder if easy seed funding is somehow damaging the ecosystem.

    1. Tom Labus

      It’s always interesting to see if someone or a company will go out in the world to test/sell/hustle their idea. Selling an unknown product/service/tech is not a pleasant experience.

  19. Dave Pinsen

    It would be interesting to see how different the mix of start-ups at an accelerator would be if acceptance were limited to ones that had been bootstrapped for a few years first.

  20. Anonymous

    Fred, bootstrapping usually eats precious management bandwidth leaving lesser time for the product. Often capital constraints would mean tradeoffs between capital versus time. In such a scenario, the company would grow slowly.I have seen VCs questioning us why did our company only grew to 750 customers in 3 years (150,250,350) and how can we project 4000 customers at the end of year 4 and even though we explain that we took first year to build the product, second to build a scalable delivery process and third to revamp our sales process.We probably could have iterated faster if we had the luxury of capital funding but things are as they are. My question to you would be as a VC how do you look at slow growth of a bootstrapped company and does it affect your judgement about funding or not.

    1. PhilipSugar

      I think you answered your own question when you clearly laid out what you did year one build product, year two scale delivery, year three figure out sales process.The classic line of 9 women can’t have a baby in a month applies.So another scenario could be you spend tons of money in year one and everybody learns you have a crappy product.You spend money in year two and you can’t deliver and have unsatisfied customers.You throw money in year three and don’t have a sales process resulting in chaos.

      1. Kasi Viswanathan Agilandam

        I have always heard the classic one liner with different gender… does not matter means the same.

      2. LE

        only grew to 750 customers in 3 years (150,250,350) and how can we project 4000See now if I was framing that I would have booked all of those 750 customers in a much shorter time frame. I wouldn’t have said they were acquired over the course of 3 years and wouldn’t have said the idea was being worked on over 3 years either. People don’t like stale ideas (same as “days on market” in real estate).

    2. fredwilson

      it has an impact. but it also tells us something important about the founder(s) and team. positives and negatives. the balance out.

  21. SharelOmer

    Inspiring post thanks @fredwilson:disqusWe are bootstrapping a social startup from Israel for over a year, and it’s great to read this words :)bootstrapping is a character, that can indicate of people that believe in what they do so much, that they are investing their future,family,life in their passion.. 37signals and MailChimp are good examples :)For a bootstrap startup, you don’t sell the dream.. you sell a business…unlike many startups…for a bootstrap startup you can’t say: we will add this after we get founded (affiliate program, partnership, ads, marketing machine, sales funnel…) need to think how to do that without the big money…and keep on pushing…which is very hard.People say you can’t measure a person heart, i think that bootstrapping for 3 years is a very clear indication of that person heart πŸ™‚ amazing!Thanks,Sharel

    1. William Mougayar

      Well said “you can’t measure a person’s heart”. ^2

      1. SharelOmer

        Indeed! thanks for sharing πŸ™‚

      2. Timothy Meade

        Their interests though…, coming along nicely.I got an email about the state of the “A VC” community and it took awhile to realize that applies to any community you engage in. (Thought it was just for us for a minute.)

    2. Matt A. Myers

      Definitely – you can view the symptoms of having heart!

      1. SharelOmer

        Thanks for the comment πŸ™‚ appreciated.



    4. fredwilson

      that’s exactly why i wrote this post. to showcase that we appreciate and notice that “heart” you mention

      1. SharelOmer

        πŸ™‚ this means a lot Fred, I enjoy reading your posts for many years now, and always find new ways to pivot and look at things differently. thanks ! πŸ™‚

  22. panterosa,

    Keeping to the core vision is tough when no money slows you down. My two previous partners left for outside reasons very quickly over a year ago, and I’ve not replaced them since I haven’t found the right fit. Now I do everything myself. As a single mom that is not easy, and on dwindling funds it has my coach very nervous. I don’t want to take on any debt either.How many nails can I eat for breakfast? I am not competitive in the sense I must *prove* something, I just want to get my product out and have people enjoy it.

  23. Telco To VC

    I guess there is no right or wrong way to go about it. However, bootstrapping does make the company seem more attractive to investors when the team feels the need to raise money externally.

  24. KeithCowing

    Bootstrapping harnesses the power of singular focus: How do I build a sustainable business? Sometimes you have to raise funding aggressively to shoot big. But leaving questions like how to raise $, how to prepare to raise your next round, how to please outside stakeholders, etc. until after you’ve answered the primary question – can pay big dividends.Thanks for the post, a lot of people don’t see what goes into businesses before high profile fundings.

  25. jason wright

    Bootstrapper = outsider?Is there a term for an insider?

  26. Anonymous

    That which does not kill us makes us stronger.–Friedrich Nietzsche (probably talking about bootstrapping)

  27. David Repas

    Bootstrapping != successOne of the easier things to do in life is start a bootstrapped company that goes nowhere. Lots of people do it.One of the hardest things to do in life is start a bootstrapped company that shows real signs of traction – or god forbid actually produces a real, valuable and lasting business. Few people are able to do that.Of course, either outcome teaches valuable lessons – don’t think that bootstrapping alone equals success. It doesn’t.Btw: I’m a huge supporter of not taking seed funding early or at all – in other words, bootstrapping.

  28. Kasi Viswanathan Agilandam

    This is the idea – go to seed.This is how it will work- go to angels.This is the proto – go to super angels.This is the revenue model – Yes. I am listening.This is the balance sheet of last year – Let us sit and talk across the table.We are cash positive – Let me scale it…come, let us have dinner and talk.I am facebook- Please take my money I am begging you :-).

  29. William Mougayar

    I met an entrepreneur last week that has been bootstrapping her startup via AirnBnB.Bootstrapping is also a mindset. It’s like training in the desert before you get an abundance of food and water. It makes you fit and lean in the operating sense. It makes you appreciate a lot more the funding that you get later. You don’t take it for granted.But isn’t there also a relationship between the right timing and the right funding?The bootstrapping period may be related to the fact that the timing wasn’t 100% right for the market growth/readiness. So, the bootstrapping period is more or less a waiting period not just to prove the business model (nail it before you scale it), but also for the market dynamics to be right as well. In this case, the virtual work market is about to take-off and USV is placing its bets in select opportunities that fit their targets.

    1. panterosa,

      William, bootstrapping timing also depends heavily on how big your MVP is, and how long it takes to build.For example, my MVP is quite large, and exists in two platforms – digital and physical. The sheer size and breadth of my content, which makes the Minimum in my MVP neither small, nor narrow, is exactly the reason it is considered such a strong system. Baked in cross platform integration is it’s strength and long road map, yet exactly why it takes so long to build and get to revenue.Getting users on the MVP, before running out of cash building it, is the challenge. I have no issue go lean right down to the wire, but you can only get so lean….

      1. William Mougayar

        I was mainly referring to market timing. You may have a mature and functioning product already for 3 years and still be bootstrapped (like DDG & Beehance example). MVP and “large” are oxymorons….The M stands for Minimal, right? So, I’m going to be hard on you here. Can you bring back the MINIMAL in your MVP, and don’t make a LARGE VP? That’s your challenge if you want to follow the Lean model which says – your idea is an experiment waiting to be validated. You don’t need to LARGE product to validate your product idea.

        1. ShanaC

          I would say that depends.Medical industry you will need funding, and MVP doesn’t exist without approval….

        2. panterosa,

          William, I know I’m running an oxymoron here. And I appreciate the rigor you apply to my project to see if it holds water. But I’m trying to hold the ocean and my budget is a paper cup.I have taken on the largest problem in biology today – visualizing the Tree of Life. NSF is throwing money at many scientists to do this, and yet many are still stuck arguing over their systems.I propose a new system, a Very Lean system. The botanists I work with so far think it has more than an ounce of genius, and completely reverses the scientists natural tendencies to make deep and not public friendly discovery and explanation. Giving a 5 year old the info of a college grad in a tablet app game is very powerful. In fact it’s so simple it confuses some adults, used to having biology be unfathomably complex. But kids aren’t encumbered by all the crap adults are. Damn I wish kids had money – they’d fund me!

          1. William Mougayar

            Is there something ‘small’ that you can reveal about it and put it out there in the marketplace. If kids can give you the love and attention, the adults watching the kids will fund you.

          2. panterosa,

            WIlliam, yes working on two fronts on the beta app. Will be out as soon as the scientists can approve my reduction of their sauce. Amazing how much work goes into “intuitive” and “simple” as I’m sure you well know.

          3. Timothy Meade

            One 5 dollar app at a time?

          4. Timothy Meade

            One 5 dollar app at a time?

          5. Emily Merkle

            would love to hear more….I am a fan of .edu app startups.

        3. panterosa,

          William, BTW, to be clear, I set out to make physical games to show nature concepts as a single MVP. I had to navigate so much info that I looked for short cuts within the field. There were none so I created my own. Since I was so early stage on games, the science got baked in simultaneously, making for much stronger product. But it did mean I now have two sets of MVP, and that’s a bitch to run by myself.But there are new signs of progress…

        4. Matt A. Myers

          There’s a certain minimum number of features that some products will require before they can gain traction – before they are valuable for economic/other metrics/effects to start cycling.Just because something requires more work, that makes it a larger project based on task count, doesn’t mean it’s not lean. Sure, there might be more inherent risk, and sure, there might be harder to convince people to invest – though then there’s also a higher likelihood everyone else has had the same challenges and is perhaps why the opportunity exists.With the project I’m focusing on now I have a prototype, though I realized there were certain features missing for it to be the MVP. And in reality it’s not that ‘large’ of an MVP if it leads to creating a network of 50+ million users.”Minimum” should be defined relative to the scope/reach/impact of each project.

          1. William Mougayar

            I’m not I agree, and you should have been in toronto yesterday to hear Eric Ries. It was a free event at Ryerson. You’re thinking in “features” whereas you should think in “user behavior”. Ask what’s the minimum # of features you need to have a sticky user experience, not the largest set you need to bring them. I made that mistake before where adding more features was the goal, and it ended-up not being related to more users necessarily. Find this ONE thing they will want to do and drive it home.

          2. FAKE GRIMLOCK


  30. andyswan

    Bootstrap, raise on an idea, partner early, never raise… there is no right answer.The ends justify the means. Build that which you wish existed.Win.

    1. fredwilson

      do the ends result from the means?

      1. andyswan

        Absolutley. Thats he point. Whatever works

        1. jason wright

          Yes, it evolves from its environment. It’s not an a la carte menu to pick from out of choice.

    2. Emily Merkle

      put a ding in the universe.

  31. Gorazd Ε vajger

    I’m not sure Stack Overflow is a good example. It’s much less risky to bootstrap a new company if you already have another company running, like Spolsky does. I don’t know about Atwood’s position at the time, but he was also famous, and the two had enormous klout and reputation in the dev ranks, so it lowered the risk, I think. It’s like Shachter being able to rely on you to promote Jig and that skills thing. :)But the SO team did do an excellent job, no doubt about that. I just don’t know if that’s a good bootstrapping example for budding entrepreneurs.



      1. LE

        37 Signals is selling a site of their “”. They are asking 480,000. No offers nothing less. If they don’t get that offer they will close it down (HN thread where Jason has commented).…Will be interesting to see if they really do close it down if not sold.

        1. FAKE GRIMLOCK


          1. LE

            What’s bothering me is the game he is playing. I’ve seen them all and I can’t quite figure out why he is so insistent on getting $480k and further claiming that he will simply shut it down if he doesn’t get that amount. I mean if Joe Anonymous did this as a bluff that’s fine. Nobody would know he was doing it. But here someone is putting their rep on the line and saying “I won’t budge on price”. And sounding like quite the asshole in the process.The only thing I can think of is he has an offer for $480k and doesn’t want to say “I have an offer for $480k” for some reason.I’ve seen cases of a wife in a divorce selling something for much less than value to screw the husband out of his 50%. I can see someone walking away from something that would require their involvement (in a transition) so it’s not worth their while unless they get $x. That is not the case here.Either way, without knowing anything other than what I read, I would be wary of ever doing business with someone who takes something of value (as has been presented) and simply shuts it down rather than getting, say $450k for it or even 200k for it. I like to deal with reasonable rational people and lacking a better explanation this is not reasonable or rational.

          2. FAKE GRIMLOCK


          3. LE

            Emotion has so much to do with how we negotiate and how we buy and sell. Obviously a 100% “rational man” would not take pride or emotion into decision making. But they do. That’s why I never advocate someone making “take it or leave it” type offers. It backs people into a corner and they have a hard time getting over feeling like they have lost control. A final offer can be a final offer but it has to be presented in a nice way not a bullying way.

    2. jason wright

      Reminds me of Twitter hatching from the Odeo(?) nest.

  32. Mark Zohar

    There is no glory in bootstrapping as there is no glory in raising venture capital. How a company is funded is interesting but ultimately irrelevant. Success and glory are a product of finding a sustainable business model that creates value for the company, its customers and hopefully society as a whole.Btw, this would be far less of an issue if the tech press and the startup community weren’t so focused on celebrating the vanity of raising VC financing and instead focused on celebrating true innovation and value creation.

    1. Matt A. Myers

      I think it depends on what view-point you’re analyzing a company from.Focusing internally – absolutely the end result of what you want to is achieve is what truly matters.If wanting to be the most attractive investment to investors, you have to see/determine what they value and use those metrics to guide your own behaviour.The relevance then really lands on how much control you want to maintain, how much ownership/equity that you want to hold onto. If you just want to get your idea out there and don’t care how much ownership and control over what you helped create then I’m sure you can find someone to give you $100k for 50% of your company – which is fine – though in reality if a single investor (not thinking crowdfunding) is willing to give you $100k then they’re likely hoping forIn the end everything that’s meant and ready to happen in the universe, will happen – and if that includes moving your projects forward, then it will happen because you’ll find a way – because it truly matters to you.

    2. PhilipSugar

      Completely agree.

    3. Kasi Viswanathan Agilandam

      Yes.Lot of focus on “X being Valued at xxx-billion ” rather than “Value created by X”.

    4. panterosa,

      So much Innovation is lost in trying to see if it creates sound business. Ultimately it should, but often the innovation is cowering behind a stupid business plan a lot of the time.

      1. Dave W Baldwin

        You are right.It is a two way street. Those with money often times cannot understand the range a given proposed development will enable… so you have to hand them a ‘plan’ that appeases old school.

    5. Rohan

      Nice comment. I don’t find it too different from human life.It’s great if you became successful with no affiliations (i.e. big brand company experience, big brand education).It’s great if you became successful with them.All that really matters is that you did something worthwhile.It’s easy to get lost in the rat race though. And as a quote I like goes – ‘Even if you win the rat race, you’re still a rat’Nice to remind ourselves of that. Thank you Mark.



      1. Andy

        Exactly. The reason funding is celebrated is because its the best way to quantify the statement “This value has been created by X”, and it’s also good for a headline.

      2. LE

        Money has universal appeal, creates it’s own halo, and is always interesting to readers.The first girl(s) to dance at a strip club to finance her startup dreams will also make a great story. (Remembering here stories about girls who worked their way through medical school as pole dancers that have made the rounds).

        1. RichardF

          a pole dancing geek girl that can code in python….every male geek’s fantasy

          1. testtest

            i’d prefer she knew javascript: both server-side and client-side. but, i suppose you can’t have everything

          2. Emily Merkle

            pole dancing is overrated.

        2. panterosa,

          I have pole danced, and can out dance quite a number of women I’ve seen. Even at my age πŸ˜‰ Not sure how my daughter’s private school will like mommy out tricking for start up cash. There are some lines not worth crossing.Days past I’d have made a mint.

          1. Emily Merkle

            if I had any rhythm I would be a dancing machine….

        3. Dave W Baldwin

          I thought most of them were in Law School….

      3. Dave Pinsen

        Other things are measurable (e.g., revenues), but are often undisclosed.

    7. David Miller

      100% agree on the focus on the celebrity of raising VC money. That’s why, to follow up on the “Dig Deeper” post, I’ve stopped reading fund-raising articles. Why dignify them with my attention?I suppose those stories would be better if we learned more about the company’s model and how it plans to use the additional capital to achieve it’s goals. We hardly ever do. Reading that type of story would be helpful.Nice comment.

    8. LE

      if the tech press and the startup community weren’t so focused on celebrating the vanity of raising VC financing…The product that the press is selling is infotainment. They write what readers find interesting. That is their business. Without readers they can’t sell advertising. It’s really that simple.The startup’s job is to have a story packaged in a way that the press will feel that the public will find interesting. It’s fairly easy to do to find that angle but it takes creativity and a bit of selling.

    9. fredwilson

      i agree 100% on your last point but take some issue with the larger comment. i think how you are funded to some extent creates the culture and has some impact on “finding a sustainable business model that creates value for the company, its customers, and society as a whole”

      1. kidmercury

        definitely siding with fred over fg in this beef

        1. FAKE GRIMLOCK


          1. fredwilson


    10. Fred Destin

      you’ve got to celebrate along the way. Funding is a milestone to …

  33. Matt A. Myers

    I think bootstrapping is a signal for passion, dedication, and perhaps more importantly – keeping lean. It also reflects, suggests, shows potential that ideas and plans have been more thoroughly thought-out and a path more distinctively carved out after X years of tinkering, learning, and evolving of plans.If you go into an incubator or get seed or angel money pre-maturely then you’re only hurting yourself. A well-run business should be trying to run as efficiently as possible, and be as tight – lean – as possible, and a good constraint to follow via added pressure is for a founder (founding team) to try to keep as much equity as possible. Not only is this good for the founders, it’s also potentially a strong signal to future investors that you know what you’re doing and are frugal.It shows you’re patient as well if you don’t do things pre-maturely and re-enforces, even subtly, that you’re smart. If you’re rushed you’re more likely to make mistakes, just inherent to nature. An example might be if you structure your initial founding team in a potentially disastrous way by improperly vesting newcomers, and whereby an original team member decides to leave after a few months – and keeps 25% with them (perhaps more – eek!).If you’re patient you’ll research, and learn first, the safest way to go about doing it. Someone who likes to research and learn is also an observer, a feeler, and hopefully good at discovering the nuanced aspects to the problem(s) you’re trying to solve.I would want to invest in someone who shows the ability to analyze, communicate, learn and integrate new information in a micro and holistic way. I think understanding the holistic piece of any situation or experience you enter takes time, patience, and not doing things pre-maturely – and bootstrapping as long as makes sense – is a great metric for determining who’s a good bet for investing – at least if you’re in it for the long-tail and not just playing for smaller short-term gains (with inherently higher risk).

    1. fredwilson

      you articulated its benefits well

  34. ShanaC

    One of the reasons I think funding got popular was that age of founding seems to be going down ad the media came in. Someone young often doesn’t have savings (they have negative savings, aka debt) and there isn’t a way to get through bootstrapping easily without some cash to keep them afloat through that.

  35. Kirsten Lambertsen

    According to the Startup Genome project, most startups like mine raise btw $25k and $100K during the first 5-7 mos. Are they all still bootstrappers at that point? Does bootstrapped mean, funded only by the founders’ personal cash and resources?

  36. Kirsten Lambertsen

    Maybe it’s just that by the time a bootstrapper shows up in a VC’s office, he/she has traction. This economy has created a lot of entrepreneurs who don’t necessarily have access to outside money early on. The survivors are starting to surface and take advantage of all the opportunities.

  37. PhilipSugar

    All companies waste money. It’s a question of when, how much, and whose. I wrote about that a year ago.The beauty of bootstrapping is that you don’t have much, you do it over a long period of time and you really worry about it because its yours.That is not to say I don’t think there is a time to raise money and really hit the accelerator.As I’ve said before though if you have the attitude well its only the VC’s money who cares. that is going to end really badly for all involved.

    1. Emily Merkle

      2 projects ago: I took a draw on commission. period.

  38. Jeff T.

    What is considered bootstraping? Is it starting a business without any outside funding whatsoever? Using your own cash and revenues generated from business? Does this include friends and family funding?

    1. fredwilson

      there is no perfect answer. i use the “no outside money” definition. it certainly helps if you can use your own funds though.

  39. Brandon Burns

    Usually people translate bootstrapping as surviving on ramen until funding.To me, Duck Duck Go, with one dude coding by himself, “bootstrapped.” Behance built a business that sold books, tools, conference tickets, and actually supported a staff, an office, new products, innovation… and did it for years.Kudos to both, but the latter is inspiring in a completely different way. I think we need a new term for that method of building a startup, and to highlight the people who’ve taken that route, so more people can be aware of, learn from, and repeat that path.On another note, all of this goes to show that the self-propagated myth of the wise sage VC plucking the next big yet-to-be-proven diamond out of the rough isn’t a reality. All of the “bootstrapped” USV investments mentioned proved themselves, thoroughly, before they earned investment capital. Even if you take the over-used “Harvard kid with a computer and a dream” version of the Facebook story, that’s also false; Facebook had half a million users before they got investment. As much as VCs like to pontificate about their ability to see the future, they’re really just following the trail created by entrepreneurs who’re already on their way there. Which of course is the smart thing to do with someone else’s money. But if the rhetoric matched the behavior, there’d be less false, damaging “anyone with a dream can be the next Instagram!” nonsense spread around.

    1. fredwilson

      VCs don’t have crystal balls. at best we are “just following the trail created by entrepreneurs who are already on their way there”. at worst, well i don’t want to go there.

    2. Alexander Close

      Agreed, it’s a different route giving different experiences and flexes different skill sets. There should be different terms.But I think it should be a different term for the former, rather than the latter. Wikipedia attributes “bootstrapping” to a phrase “pulling oneself over a fence by one’s bootstraps”. Aka, using what you already have to creatively overcome a seemingly high obstacle. I think a team who finds alternative revenue streams while building their business should be called bootstrapping. A team who survived on ramen for 5 months while coding their site, while also a mark of achievement, should be a different term.

  40. Cam MacRae

    Will be interesting when you quantify the impact this approach has on the fund e.g. does this kind of proto-milestone funding result in a smaller share of higher expected returns? If so, what is the observed effect on the portfolio?

    1. fredwilson

      same question chris dixon asked and it is a good question. we will know in ten years or so

  41. Skinner Layne

    The presence of money solves many problems; the absence of money solves many different problems. Balancing the two should be the goal of investments, but investors like round numbers–and entrepreneurs always round up.

    1. fredwilson


  42. Elia Freedman

    What I want to know is how easy is it to go from bootstrapped to funded? There is a mentality about bootstrapping. Does it carry over? Does it hamper the company? Does the CEO need to be someone different than the original bootstrapper? Can the “spicket” just be turned on like that? Once you get used to living without much cash and safety net, can you ever feel comfortable with having cash in the bank and making aggressive growth plans?

    1. PhilipSugar

      Here is the challenge. Once you have revenue you get judged by the numbers instead of funding a dream.The only negative thing I have to say about all the seed stage funding right now is that eventually you get funded on the numbers. You can’t stay pre-revenue forever.

      1. David Clarke

        Does bring to mind Yossi Vardi’s immortal line about ‘revenue being a distraction’. Forgivable chutzpah since he did also give us The Economics of Dreams.

  43. Adam Martin

    As someone who is bootstrapping with his Mum’s new window fund I can tell you several things about this ‘stage’ of a business:1. Bootstrapping is a misnomer, the process is more of a velcro strap, joining one side (the idea) to the other side (the market)2. It’s the most exciting part of the journey, decisions are honed based on zero budget, the excitement and confidence is at a premium, ambition is more important than money, if it ain’t you’re in the wrong business3. The longer you strap, velcro or otherwise the more you’ll own of your company, the more you’ll be able to control its future, shorter strap time, more equity in exchange for cash, seems like a pretty standard formula4. Boots are made for walking, I think a 60’s popstrel said that, but they are, and if can’t walk to the market in them, no one is going to give you the money for a limo to go get your groceries!

  44. Max Sobol

    There is simply nothing more satisfying than the organic sales of your product/service keeping the lights on, compensating you and sustaining your growth. If you’re one of the lucky ones, that gets amplified without the associated dilution. I’ve been on both sides. The successful bootstrappers deserve as much media attention as the VC-backed boys and dare I say, even more respect.

    1. PhilipSugar

      Agree completely and I too have been on both sides. Here is the thing: If you’re bootstrapped and staying that way Media doesn’t matter.I’ve come to embrace both the term “lifestyle business” and the concept that I don’t give a shit if I’m in TechCrunch. Its actually a negative. I’d rather fly below the radar.I had a PR firm approach me out of the blue, he had researched our business, he wrote a very nice email, he took the time to really write me a note. Where he lost me is when he said we could totally get in TechCrunch, etc. I thought to myself why? I want to be in Colloquy and NRFs magazines and I am but nobody here has even heard or cares about those, and I’ve come to realize that’s ok.

      1. Max Sobol

        Philip, the thing is, I’m never necessarily trying to build a “lifestyle business” as classically defined. The reality is that I want hyper-growth (don’t we all?) but I think you can achieve it if you’re just that much hungrier and everyone on your team sees the vision. The thing that bothers me most is the assumption that you need funding to achieve that. Funding is good stuff, when and if the stars align but if you can do it without…holy grail, clearly. Media attention is nice too but it has to be the right stuff, as you say.

        1. PhilipSugar

          No I don’t have to have hyper-growth. I want sustainability. If you are somebody like SAS and you just consistently grow 20%-40% a year pretty soon you are pretty damn rich if that is your thing. If you crank 100% one year and drop 50% the next you are back to where you started. Yes if you manage to sell to Yahoo at the peak good for you, and you will be celebrated by the Media. If you are one of the majority that don’t there will be silence.

      2. LE

        At a certain point, as the saying goes, you have to accept that “this is the life we’ve chosen”. Trying to explain to people what I do currently is something that very few people, almost nobody, knows about. And the thing I did in the past was nothing sexy and people didn’t care about that either. (But what my wife does people do care about and automatically think is a big deal.) In the end it really doesn’t matter what people think. What matters, and this is important, is what you think people think. So the first step is being a little more narcissistic and thinking you are great and the rest will follow. (This isn’t directed at you by the way Phil, but “you” the reader).My father is only nominally successful and is a very happy person. The man celebrates the smallest accomplishment as if he just pulled off the biggest coup. He is far happier than a man in NYC who owns big office buildings but is constantly comparing himself to someone with even bigger buildings and feels inadequate. It’s not like everyone doesn’t do this. It’s the degree.Remember these lyrics from John Cougar Mellencamp:There’s a black man with a black cat Livin’ in a black neighborhoodHe’s got an interstate runnin’ through his front yardYou know he thinks that he’s got it so goodAnd there’s a woman in the kitchenCleanin’ up evenin’ slopAnd he looks at her and says, “Hey darlin’I can remember when you could stop a clock”

        1. PhilipSugar

          Here’s a great story from the weekend. All my fraternity brothers are back for a reunion. Many CEOs, hedge fund guys, iBankers, Big Lawyers, Military. There is one guy that follows concerts around and makes and sells tie died t-shirts.He brings a custom set of tie died t-shirts to commemorate the event and has one for every brother. There we are all from the stuffiest iBanker to the most straight laced Navy Seal standing there in tie died t-shirts listening to Bertha.Who do you think was most important/happy. Beautiful, wore that shirt to the office today.

          1. fredwilson

            was his name Carl?

          2. PhilipSugar

            No it was John.

          3. PhilipSugar

            Sorry for the last reply…..right over my head Fred, sometimes I’m thick

          4. JLM

            .True story.Go to 30th college reunion.Generals, Captains of Industry, engineers, millionaires, business owners, writers, killers.One of our classmates led a coup and overthrew a sovereign nation’s government — Thailand.Overthrowing a sovereign government plays trump at college reunions..

          5. PhilipSugar

            Yes, but what I was thinking was Mark 12:44 I probably will get heckled for that, but it was one of those moments that really made you think. I wanted to give him a couple of stone out of my wallet but he would have none of it as he had done it out of love. (he also told me I was the only one that had offered)

          6. JLM

            ,The gift is always measured by the cost to and thought of the giver. Nothing sweeter than that.I have a WWII vintage combat engineer’s demolition knife — all steel and totally indestructible — I was given it by a soldier who had come by it the hard way. He gave it to me at his retirement party with tears in his eyes.It became a lucky talisman.That knife has now served in 6 wars. I lent it to a guy who took it to Iraq and A’stan. He returned it to me.It is my dearest possession not because of what is on the outside but because of what is on the inside..

        2. Emily Merkle

          I feel you.

  45. Patrick Dugan

    I was going to write about how I’ve been boostrapping, but I had to take calls from 2 clients. Selling your time so you can pay for others’ does become a viable arbitrage once your professional rate hits a multiple of about twice or maybe 3-4 times that of the people you’re hiring. I probably would have difficulty accessing that spread if I lived in the US. It is however, a fairly stressful arbitrage to keep running, and the lack of management bandwidth would be critical outside of the prototyping stage. Planning my exits…

  46. Joshua Dorkin

    @fredwilson:disqus It is nice to hear someone of your stature speak about your support of bootstrapping. I especially appreciate you talking about your interest in companies that have been doing it for a fair amount of time — it seems that many VCs look at this as a negative, unfortunately.I’ve personally sat in meetings with VCs who have passed this sentiment to me and my bootstrapped business. That said, over the years, we managed to prove our concept, grow, and now we’re seeing lots of interest in our platform.As @liad:disqus said, I believe that bootstrapping “should be seen as a far more prestigious badge of honour than closing top tier VC.”For some reason, everyone in tech gets excited when a company gets funding at concept stage. They should get more excited about the guys who worked with no resources to build a viable product and who demonstrated that they don’t need a massive budget to make things happen. Unfortunately, the tech press will write about any idea/company that has gotten dollar 1 of investment, instead of focusing on quality ideas, quality companies, and quality entrepreneurs.Shiny object syndrome . . .There are certainly negatives that come with bootstrapping, but I believe that if you can get a company off the ground as a bootstrap, you’re going to be well prepared once the money does come.Thanks again for the post!

    1. Matt A. Myers

      It’s one of those things that if you bootstrap and understand the value with it, and investors understand the values associated with it – then you can find a good match.More investors now are putting money into pre-revenue companies and the like – though there’s still a need to be cautious of ‘dumb money’ floating around of people who are hoping to just get lucky – though I’m not sure those investors can help you as well as those who genuinely understand it all, and not just doing what looks popular / profitable.Re: Excitement at concept stage – I think you see that at places like Hacker News, though unless you daily the site you can miss those sparks – and then they perhaps never hit the masses.

      1. Joshua Dorkin

        I agree completely, @mattamyers:disqus .As for HN; I definitely need to spend more time there . . . thanks for the reminder.

        1. Matt A. Myers

          You’re welcome! πŸ™‚

    2. fredwilson

      money likes to follow money. trust me. i see it every day. it bugs me.

      1. Joshua Dorkin

        High school rules, I guess…

        1. Carl Rahn Griffith

          There’s still a ‘Jock’ and clique culture out there, for sure – especially in the UK/Europe.

  47. Dan Bowen

    Is there a right answer to this question? I don’t think so. I bootstrapped my first venture and did just fine but over 10 years. Had an exit but not FU money it potentially could have been had I brought on some institutional money and scaled to the potential we always dreamed of…at the same time, would we have? There are countless great ideas, startups and even lifestyle businesses that never step up on stage because they either couldn’t or didn’t raise the money or talent needed to get there. Not taking away from that world, I lived it, but the next time around I’ve asked myself it I want to be right or rich? You can certainly do both bootstrapping, but this time I will balance the fear and ego that confounds the decision to bring on money much better.

    1. fredwilson

      no right answer for sure. but bootstrapping is a better option than many think

  48. Irving Fain

    First off, it’s great to hear support for alternative paths other than raising money. Not enough of this discussion. That said, don’t you feel that the “amounts of cash sloshing around the web/mobile startup ecosystem” are dis-incentivizing people to actually bootstrap and grow more slowly? We boostrapped our company for the first 2+ years not collecting a salary and running as lean as possible. At some point, even if we wanted to continue on that path, due to the excess capital in the market, we knew that others in our space were either raising rounds, had raised or were going to, In that case, we wouldn’t be able to grow as fast as others and essentially “keep up” without also putting more capital in the business.It’s not only the glut of cash in the market today, but also the intense discussion around pace of growth, path to a million users, etc. that seems to be driving people to go out and raise money quickly in order to grow faster vs. taking a more organic path.

    1. fredwilson

      yes, which is one of the reasons i wrote this post

  49. Kyle Van Pelt

    What an interesting topic. I agree with @liad:disqus when he said that all startups should be forced to go through a mandatory bootstrapping process for a couple of reasons:First, and most important, bootstrapping forces you and your team to continue to be CREATIVE. It seems in the startup world that everyone is extremely creative until they have millions to throw at problems. When you don’t have any money, you have to work smart to make great things happen.Second, I think that when you bootstrap successfully investors will come to the table with a lot of confidence because you have reduced some of the risk. @fredwilson:disqus wouldn’t you agree that you and your team are far more comfortable investing in someone who has fought through all of the difficulties of bootstrapping a company and made it through the fire to get into your board room and ask you for money?



    2. fredwilson

      yes. i totally agree.

  50. James Ferguson @kWIQly

    Bootstrapping is the only reality for much of the start up world.- Outside centres of VC (California, NY, Seattle etc) bootstrapping sends signals as follows:.1) There is blood in the game – entrepreneurs really believe in what they are doing.2) They are taking a medium / long strategic view rather than seeking a flash in the pan. 3) They will have stability and experience by the time they ask for seed. 4) They will have a more mature network environment with suppliers, adviser, banks. 5) They will know and understand their competitive environment better. 6) Their forecasting and metrics will be more reasonable than aspirational. 7) They will only ask for money when they can do something useful with it – why dilute if you are viable unless it opens up real growth prospects.External advantages include:Better staff hiring – If as I do you live in the alps there is no lack of extremely well educated well-trained competence to hand.Local knowledge advantages – It is MUCH easier to start with a toehold in Europe and then open up the US than to import American techniques into a very diverse regulatory and cultural market. Disadvantages – It is hard work – but hard work pays !

  51. Carl Rahn Griffith

    It can be bloody painful, I know that much…

    1. Matt A. Myers

      I don’t like using upvotes, though I was motivated to upvote this.

      1. Carl Rahn Griffith

        Lol, thanks, Matthew. The lexicon of our industry sometimes detaches us from the harsh reality of often being broke(n) and hurt.

        1. Matt A. Myers

          Interesting how being broken means something isn’t right (it needs fixing) – isn’t how it should be. Broke means you’re poor (and must cope with the ill effects of such) – and then equally in my mind, something isn’t right then – isn’t how it should be.

          1. Carl Rahn Griffith

            Right now I’d be happy with a dullsville 9-5 job, Matthew – and frankly that is my priority/focus now as I seem unable to make zero traction lately, after almost a decade of following this path – as my long-suffering wife has pointed out, I have bootstrapped at the expense of her, also – let alone the hidden cost/s of the pro bono work I have done elsewhere. Enough is Enough.All enquiries are welcome! πŸ˜‰

          2. Matt A. Myers

            I don’t have time this week, though I’d love to Skype call with you sometime next week or whenever convenient. πŸ™‚

          3. Carl Rahn Griffith

            Cool – on Skype I am carl_rahn_griffith – speak soon, Cheers!

          4. Matt A. Myers

            Appears I have a downvoting-troll following me around… Will add you now.

          5. Carl Rahn Griffith

            Crazy. I don’t see why the voting is enabled to be anonymous – can’t abide keyboard warriors who thrive on anonymity. Pathetic. Cheers!

          6. panterosa,

            My daughter, PantherKitty, suffers as your wife does, but hopefully not much longer…. At least she sees passion in action and maternal feistiness!

          7. LE

            after almost a decade of following this path – as my long-suffering wifeI’ve heard stories over the years of wive’s who held their men back and I’ve heard stories of wives who have pushed their husbands and are fully on board with them doing whatever they need to do to achieve success.I had a conversation with a young tow truck driver last night who is working 7 days and sounds really motivated and full of ideas, personality and energy and could probably own his own towing company some day. At one point he told me how his girlfriend is always complaining about the hours that he works. My advice to him would be that if he wants to get ahead and own his own company he needs to get rid of that girlfriend.

          8. LE

            after almost a decade of following this path – as my long-suffering wifeI’ve heard stories over the years of wives who held their men back and I’ve heard stories of wives who have pushed their husbands and are fully on board with them doing whatever they need to do to achieve success.I had a conversation with a young tow truck driver last night who is working 7 days and sounds really motivated and full of ideas, personality, and energy. He could probably own his own towing company some day. At one point he told me how his girlfriend is always complaining about the hours that he works. My advice to him would be that if he wants to get ahead and own his own company he needs to get rid of that girlfriend.

  52. chris dixon

    I wonder if there is any data on bootstrapped vs non-bootstrapped VC returns. It seems like all the billion dollar companies you hear about raised money early on, but this could very well be a myth.

    1. fredwilson

      we will have some data in ten years!

    2. falicon

      This was my initial question too…I suspect the ‘success’ rate of bootstrapped companies who eventually raise money is higher…but that the ‘home runs’ that really make the fund profitable are probably the freaks of nature where bootstrapping doesn’t really matter much one way or the other.But as usual, I have no data or examples to back up this thought/feeling…yet.

  53. rudy

    Coming from a ‘brick & mortar’ viewpoint, bootstrapping (or saving pennies trying to make $$) works fine. II NEVER received as much joy as when I was a kid growing up working in my parents bakery. We took that 1 bakery and mushroomed it into 2500 stores. Of course that took 10 years.Still the sense of accomplishment and knowing you did it on your own was something I always tell me wife to relish, there is no better feeling except the birth a child. Although most of the time won’t know this until far after you’ve reached it.Allowing people to share in your vision is the price of admission, for the cost of money, isn’t fun. Suddenly, outsiders are telling you what you need to do.In our case, it weighed greatly on our decision and it weighs on our business model. If your business is never to make any revenue, then yes, absolutely bootstrap until the level of usage warrants outside capital. But if your business is seeking to capture and seize the markets your entering, you make the deal…so, it depends, is my thought on the matter…

  54. another cultural landslide

    Bootstrapping offers one benefit no other method can offer: it tells you if you really have the passion for the project.If you’re willing to sacrifice everything it takes to make your idea come to life, it’s the right idea – and nothing will stop you.Comfort is the great idea killer.

    1. fredwilson


  55. Matt A. Myers

    @fredwilson:disqus I’ve got this nice downvoting-troll following me in this thread. Let’s see if my comments disappear due to some trolls having equal power now than people being supportive/moving conversation forward via filtering for quality, vs. killing decent conversation/dialogue.

    1. fredwilson

      you’ve also got fans here who are apparently upvoting your comments to compensate

      1. Donna Brewington White

        But doesn’t this display a lack of integrity in the vote feature?Admittedly, I am up-voting as well in support of Matthew. But, I’d rather use my vote to express appreciation for his comment rather than to express appreciation for him or to fight trolls.

        1. jason wright

          So what is the definition of a troll? Someone who down votes is a troll?

          1. Donna Brewington White

            Someone who harasses is a troll.

        2. fredwilson

          i don’t have a fully baked opinion yet on the move to up and down votes

          1. Donna Brewington White

            I trust the Disqus guys enough to know they had some rationale behind this. And I guess this is what beta is for.

          2. testtest

            i’m guessing you’ve not got a downvote yet, fred. and may not for a while. so i downvoted the comment.

          3. testtest

            as in, how can you make a judgement if you only get upvotes

          4. fredwilson

            It doesnt bother me. Downvote away on my comments. I am not saying its not an issue. I am just saying it doesnt bother me

          5. testtest

            i don’t mind either. does limit the upside of being contrarian, though: downvoting you to make a point about downvoting got downvoted.also, having the votes as a total mixes the signal a bit. a comment that gets 70 upvotes and 70 downvotes–resulting in net 0–is very different from no votes at all. some comments are polarizing, which can be a good thing (or at least of interest).

          6. PhilipSugar

            Haters are going to hate. You should only get as many down votes as you have received up votes. Each down vote takes your up votes one down.

          7. William Mougayar

            That’s about what I suggested to Daniel. Down shouldn’t allow a comment to go negative.

          8. PhilipSugar

            Somebody who comments we are saying.

          9. Donna Brewington White

            When I said earlier that “I trust the Disqus guys enough to know they had some rationale behind this” I did not mean to imply that I think the rationale necessarily justifies the feature.

        3. panterosa,

          Donna, I up vote you in this comment, after up voting Matthew. The voting thing needs ironing out.

      2. PhilipSugar

        No, I think haters are gona hate. Letting them hate just gives them an outlet.

        1. Emily Merkle

          nice way to look at it…

  56. Ben Apple

    Bootstrapping is where all the fun is!

    1. Ben Apple

      No pain, no gain

  57. Allen Lau

    There is a reason for the high number of bootstrapping companies in USV’s portfolio.It really takes a long time to build a passionate, highly engaged community. Caterina Fake was talking about this as well:…In the early days, unless you are a very successful serial entrepreneur, with minimal traction it is very difficult to raise capital. The only other option is bootstrapping your way out of the chicken and egg mode. The high percentage of bootstrapping companies is a result of USV’s investment focus of “large networks highly engaged users”.Minor correction: Wattpad raised a small angel round in Dec 2009. The team grew a bit after this angel round but in essence we were still bootstrapping until we raised our Series A last year.

    1. fredwilson

      thanks for stopping by and correcting me on your funding history Allen.and your analysis of why bootstrapping works well for a large number of our portfolio is spot on. i love your disqus avatar. so nice.

        1. fredwilson


  58. FlavioGomes

    I think a reasonable period of bootstrapping uncovers and brings to the surface the true character of the company and it’s founders. Despite it likely being the most grueling phase of a business, it is an essential environment for foundation building. Not all cracks and leaks can be solved with money alone. Its way too tempting to patch the symptoms when you have access to cash.

    1. fredwilson


    2. Emily Merkle

      well said.

    3. Emily Merkle

      very well put.

  59. matthughes

    Bootstrapping is bringing a knife to a gunfight – which is OK if you’re really, really good with a knife.

    1. FlavioGomes

      Yes…but if you win a few fights with a knife….you’ve earned the right to handle a gun. You now can truely respect its range and knockdown power.

      1. matthughes

        If you win a gunfight with a knife you just take the guy’s gun.At least that’s what I’d do if I won an actual gunfight. πŸ˜‰

    2. Carl Rahn Griffith

      Apropos… ;-)…

      1. matthughes

        Classic.He just wasn’t good enough with the knife. πŸ˜‰

    3. Emily Merkle

      Bootstrapping is always advised if you can.

  60. kidmercury

    boostrapping is the real bull market as it is detached from the money goldman stole and thus not exposed to the capital that created bubble 2.0. its driven by the real fundamentals that make the price of a startup so cheap.but it’s still too tough. i think crowdfunding is going to open up some really great opportunities for the bootstrappers. there needs to be more of an infrastructure for bootstrappers. i think that would benefit many pro investors like fred as well as it would give them a better data set to choose from.

    1. Carl Rahn Griffith

      As long the Crowdsourcing/Kickstarting boom is fuelled by a indie style of thinking in the development of ideas/creating a product/getting to market – speaking to some monetized people thinking about this, they seem more interested in the idea of making a quick buck – thus, initially at least, attracting them to hitherto unknown areas of investment simply because traditional investment vehicles are performing so poorly. They don’t see it as a worthy movement or cool – just an optional investment product/platform, with a shared risk and hopefully better returns…

  61. William Mougayar

    Hey @behance, we’re still in bootstrap mode and would like to post a job on your job board. Any chance to get a discount or something like that? Hint: Remember when you were bootstrapped not too long ago πŸ™‚ Thanks.

    1. Scott Belsky

      William – We remember well. In fact, I think the years of building a business incrementally – sale by sale – help you feel the texture in way that is not easily forgotten.Since you asked; Here’s a code that provides a free Behance JobList post for you (and other AVC readers enduring Bootstrap mode) to help source the creative talent you seek. BOOTSTRAP8 – – it will work 8 times, first come first serve. In the spirit of the AVC community, I trust that it will be used by those who are bootstrapping.Amidst all the friction you encounter building a business with limited resources, community makes it all possible (and tolerable).

      1. Matt A. Myers

        Wow. Awesome. Not sure I need to job post for design work yet, though maybe. Or perhaps I’ll get lucky and they won’t all get used and people will forget about the code. πŸ™‚

      2. JLM

        .Stronger than an acre of garlic. Well played!.

    2. Scott Belsky

      William – We remember well. In fact, I think the years of building a business incrementally – sale by sale – help you feel the texture in way that is not easily forgotten.Since you asked; Here’s a code that provides a free Behance JobList post for you (and other AVC readers enduring Bootstrap mode) to help source the creative talent you seek. BOOTSTRAP8 – – it will work 8 times, first come first serve. In the spirit of the AVC community, I trust that it will be used by those who are bootstrapping.Amidst all the friction you encounter building a business with limited resources, community makes it all possible (and tolerable).

  62. jason wright

    The journey of a thousand miles begins with the first bootstrapped step…but I’d rather fly. Do all angels have wings?

  63. David Sevenoaks

    Agree with Liad’s great opening comment.To use another food analogy from my own life: I always find I cook my most innovative meals at the end of the week when I have the least ingredients to choose from in the fridge.From the trenches though (I’m bootstapping a 1 year old own startup at the moment) I can confirm the obvious – its frikkin tough: you are trying you make enough money to support yourself (and family) very early on, using a model and product that is untested. The option most seem to take is to make money from side projects/dev work but this can really affect focus on the core mission. @fredwilson:disqus it would be great to hear how some of the successful bootstapped companies now in USV’s portfolio supported themselves early on.Thanks for the great post (and encouragement πŸ™‚ )

  64. jason wright

    “Long is the way and hard that out of hell leads up to light” – Milton, Paradise Lost.If bootstrapping tattoo this to you soles.

  65. A CTO

    When I’ve bootstrapped it also meant the co-founders went without salary for a while. That takes a certain level of commitment, and certainly increases the drive/urgency to succeed. I was only able to bootstrap (and forgo salary, etc) later on in my career, when I was also more experienced (and had a few successes under my belt). Are you finding the same among your portfolio companies, Fred?

  66. Guest

    I read an article recently about how some of the tech heavyweights (facebook, google, et al) are on a record buying spree (buy up companies to get the talent).Obviously, with bootstrapping, this makes more tech start ups available and probably cheaper to acquire.Does this signal more ideas and creativity or less? Is it somehow a high water point?

    1. Emily Merkle

      neither / nor.

  67. Tom Labus

    Cash/great margins can cover a lot of sins and delude people into thinking that they are making great decisions.Not everyone can still be self critical when there is money in the bank.

    1. Emily Merkle

      such is life!

      1. Tom Labus

        But life is better with cash.

        1. Emily Merkle

          I agree.

        2. JLM

          Yes. Well played.

  68. JLM

    .There is something primordial about struggling to start or bootstrap your first company. In that struggle you are going to find something about yourself — something very, very powerful if you are successful and maybe moreso if you are not.You will find out that you can survive on what you can kill. You will find out you can make it on your own.In every aspect of that experience, you will be challenged to go where you have not gone before, where there may be no road map and where even the shadows have teeth.And you will learn that you have a bit of grit in your soul, that you can turn the fear into fuel, that you can work harder than you ever thought possible and that you gain confidence. The kind of confidence that only comes from your ability to reflect that at that instant in time, you eat no other man’s bread.You are an independent fiercesome beastie and the world cannot dictate terms of surrender to you. Ever.You will not negotiate with the world about your fate, you will snatch it from the heavens and own it.The most important thing to remember when you are in a fight — is to FIGHT. Fight hard, like your life depended upon it.This is all that separates veterans from newbies — they know how to fight when it is time to fight and they are prepared to fashion the outcome to their own singular approval.When you have been to the Pay Window a few times and you can write your own check such that your new “boots” are Lucchese’s, you will be able to call upon skills that you developed when the fighting was hand to hand. And existence was hand to mouth. Even when you are writing big checks that take all the short term pressure off.When you are successful you will miss that struggle, the rapid heartbeat that comes from excitement of the moment, the unpredictable small victories which sum up to great triumphs and the wonder of doing it all for the first time.Even now I sometimes like to be the first car in the parking lot early, early, early and to make the coffee — damn it smells good at 5:00 AM — and to josh everyone else — hey, have we gone to half days?And then when you have done it, remember to get a whole lot of OPM because there are people in the world whose only inventory is money. You are just helping them move the inventory..

    1. FlavioGomes

      Jlm …I like you more than you like yourself …ha ha I jest. But that was absolutely brilliant.

    2. panterosa,

      JLM I find myself agreeing with you halfway. I am not a fighter, but a negotiator, which I realized fully from coaching from the revered Jerry, who promotes negotiation.I was told at a young age I had great power and to use it very sparingly. In fact, I was taught to kneel and not pull weapon because they feared me (this rankled the coach – them neutering me). Alas, like my father it seems when I pull a weapon it is death to the other. So I prefer no carnage and step back. Don’t burn the field of your enemy if you can eat his crops, or make use of him. Make nice to the extent you need something.As a fan of the Art of Strategy (my Art of War translation title, by RL Wing), I have been schooled in Not coming to conflict. Fighting/conflict is for those whose strategy is inferior according to SunTzu. I parse here a bit, but maybe not? I let you decide.BTW, I find this discussion amusing in as much as you are an RE person and I spent decades of unhappiness in my family RE biz. I was damn good at it, but I really derived no pleasure. To me it was all about numbers, management and money – I was bored by lack of content, and annoyed by annoyances.Which leads us back to the subject at hand – fighting for your ideas/content, your baby (startup). I agree one must fight for the idea and shepherd it, maternal lioness thinking. I have been fighting for some time against big science and their idiosyncrasies which I seek to rattle with Lean and Light view of how it could be done. But again here is where I don’t see fight strategy to my advantage, I see persuasion and negotiation as my allies. Most interested in your thoughts on the above.PS DISQUS is totally not up to it tonight – your reply posted as 13 hrs ago, which is quite off.

      1. JLM

        @PanterosaNot to get too weird on you but you and I are saying exactly the same thing. Why engage in combat when you can slip in under cover of darkness and take what you want? By your wits, not your blood.This is how small elite teams can compete and prevail against larger competitors and foes.I am not smarter than anyone in this world but I will outwork you and when you think you hear just a bit of a rustle in the darkness that will be me not coming to eat out of your chili bowl. But leaving having taken my full measure.I will come to work earlier, stay later, work harder and know your business better than you ever could. And then I will come for you. When I am ready and not before.I studied Sun Tzu and Rommel (his great work on tactics called “Attack”) and tried them both out in reality. They are thought welded to muscle which allows the blow to be focused so finely as to require not more force but less force and to be decisive. Why fight if it is not to be decisive?The ability to negotiate is simply a more civilized manner of combat. It is an art and a science that can be perfected like having a great short game in golf.It does not require strength, it requires feel, touch and technique. Anyone can master the short game and anyone can master negotiating.This is the secret of age and a lesson completely lost on youth. It is wisdom allowed to marinate and to become more tasty and useful. It is the tool of the lone assassin.I built great buildings in the tradition of Howard Roark. I built them for me and then gave them away emotionally knowing I had done literally everything I could to make them perfect.In each was more than a bit of my soul. Every time I drive past them I smile. My greatest love was renovating and restoring early 1900s mid rise urban office buildings.Is this a great life or what?.

        1. Emily Merkle

          Who Is John Galt?

        2. panterosa,

          Chere JLMI parse your responses in half agreement and you respond in full agreement, so I am amused by the agreement we have. Here I am, a woman, non-competitive by nature, negotiator, non-combat type, and we agree – though we agree on different terms when you respond. I most enjoy our banter since it seems we are so different and yet so alike.To respond to specifics – you built RE and I managed it – way different thing and yours was the more interesting, of course. I might have shot myself from boredom repaving parking lots to state laws. Thankfully, I escaped to launch a crazy startup with unknown returns!!Re stealth – why yes, creep in while no one notices. I have always said my greatest asset was people underestimating me. And by then it’s too late πŸ™‚ You talk of decisive strike – like pound of flesh from the heart, without them even knowing. Yes, that’s why I was feared, and asked to withdraw. Surgical strikes, like my father, the lawyer marine, the kind you never recover from. I make all efforts not to strike, and in fact I am very easy going. I give away things to not strike.Although when it matters yes, fight to be decisive. Reminds me of Dangerous Liaisons.But you give negotiation short shrift. It is not a short game of golf, not for those who don’t have the touch to be able to learn the art of it, where all come out on top. It’s a mindset in my view of win win, and few truly have that mindset.Perhaps you are right it marinates and cures with age. I have had a funny thing all my life. I look younger than my age, but have always been perceived as beyond my age mentally. Meaning I have the luxury of kicking ass on people who think I am a young/dumb chick, and still getting carded to this day at bars. Go figure.I would be most curious to know what has been your greatest challenge, and how you overcame it. I invite you to a drink on that.

        3. Guest

          Yes, JLM, for all of our differences I do admire you for your love of what you do. I have a “stash” of tee shirts that we made in the early 1990’s and they are my “touchstone.” I take them with me whenever I visit a contractor and tell them that this is what I want them to create.Very few people understand the pride and love that is shared when a consumer or a company tells you that they have owned your product or sold your product and they have done so for 20 years and they would have no other.Then of course you only smile and shake your head when someone exclaims, “It’s just a dumb-dumb tee shirt.”If it is so simple and nothing extraordinary then why are you incapable of creating the same?Cotton grown in the same fields, spun into yarn in the same factories, knitted and dyed in the same machines and just cut and sewn by different people nets you totally different results; shamefully different results.I sat through another meeting yesterday where I slowly disassembled one of my sample shirts and explained to them step by step what it takes to make a great shirt, I even took it through the dying and knitting process. In the meeting were the sewing floor manager, the cutting room manager, the dye house manager, and the knitting plant manager, all people who do these tasks for a living: Or experts. I was informed that “no one” could knit or dye as I specified.I informed them that their knitting machines and dying washers produced the fabric that these samples were made from by a company in North Carolina; its not the machines and it definitely isn’t the knowledge, its people.Then I was informed that the “market” and the “consumer” no longer respect value or quality. I told them that I found that hard to believe considering our label had been around for a lot longer than any of them have been working.My passion is to do whatever I do “well.” Sadly, I do not have your gift; I am way too blunt and to the point and negotiating is not my strong point; because at the end of the day I was pleading for them to just name their price, what would it cost me to get what I want.

    3. LE

      “is to FIGHT. Fight hard, like your life depended upon it”I find it is helpful to always be in that fight mode. I work as many days as I can even if I don’t need to work. In business you never know what the next year will bring. You don’t know whether there will be some distracting event that will prevent you from working in the future for a period of time.I’ll tell you a funny story re: coffee at 5:00am. I have special power saving bulbs installed in my office which take maybe 3 minutes to warm up. So when I arrive it takes some time until the light is optimum. I had the electrician install timers on all the lights so they would be on when I arrive. But what I found was that when I arrived and the lights were on it reminded me of being late to work. So now I don’t use the timers anymore. I arrive and turn the lights on. It’s a reaction that I could have never predicted.

      1. JLM

        .Haha, you and I have the same guilt driven work ethic.Sometimes I come to work very early and then go out to eat breakfast but first I open up the office.So I can say I was there early enough to suit me.We are all nuts..

        1. LE

          I’m lucky I remarried recently a woman who is much younger than me and works all the time (and will be working for the next 30 years) which means she won’t be (yiddish word here) hocking me to stop working when I get older. Her ex husband wanted to be a stay at home Dad and let her carry the load so we are made for each other.Not only that but I can buy whatever toys I want without her having a say. As you said “is this a great life or what”?

          1. panterosa,

            I love buying toys and games like nothing else. Except dancing, vertical, and horizontal;)

  69. Emily Merkle

    JLM: very well-expressed sentiment. I have struggled with boot-strapping. A couple times, in fact. Yes, I have learned to get by on what I can kill. There is something else that has tested my mettle, and that is my health.I am blessed to be married to my best friend and partner in crime. Together we are unstoppable. I believe with all of my heart in what it is we do.My favorite: InvictusOut of the night that covers meBlack as the pit from pole to poleI thank whatever gods may beFor my unconquerable soulIn the fell clutch of circumstanceI have not winced nor cried aloudUnder the bludgeonings of chance,My head is bloodied but unbowed.Beyond this place of wrath and tearsLooms but the Horror of the shadeAnd yet the menace of the yearsFinds, and shall find, me unafaid.It matters not how straight the gate.How charged with punishments the scrollI am the master of my fateI am the Captain of my soul.William Ernest Henley

  70. Mike McGee

    Love the bootstrapped of your portfolio companies Fred! When we started Code Academy back in March 2011, we went down the VC road but eventually found the backdoor into bootstrapping our startup. It was a great learning experience, mainly because it helped us “will our startup into existence” after the deal negotiations stalled. We’ve been profitable from day one and have had a great bootstrapping experience!

  71. ceonyc

    … Or more of a function that you’re looking for a certain amount of traction. It’s actually more interesting that you’re investing in companies that are 3 years old and less that they’re bootstrapped–because statistically speaking, most companies probably do not take outside equity anyway. At the same time, it could be a quirk of the cycle… 3.5 year old companies were started in the fall of ’08. That wasn’t exactly a great time to take money… so the survivors from that cohort probably did so without taking angel/seed capital.

  72. FlavioGomes

    There are so many incredibly important things you learn about yourself and the world when you bootstrap. But let’s be clear…it will likely be the hardest test you will ever face in your life. In some respects, I wouldn’t wish the sheer punishment on my worst enemy….it will only make them better πŸ˜‰

  73. John@PGISelfDirected

    LIAD’s comment said it all. Thanks for the insightful post!

  74. LissIsMore

    Some business ideas require skill sets and resources to reach a milestone that are beyond the founders ability. This, more often than not, requires money to acquire these pieces. Seed/Angel money is legitimately necessary in many cases.

  75. Esayas Gebremedhin

    I believe bootstrapping has the benefit that the founders can build the startup according to their imagination with little compromise. Bootstrapping is also a signal of commitment and dedication to an idea. On the other hand I think there are some outstanding startups where investors should not wait too long to invest early as their hesitation often turns off some founders.

  76. AMB

    Hey I’m testing the new disqus interface! love it! but also agree with Liad! great comment. brilliantly said.

  77. Dave W Baldwin

    Good post. I’m back here finally(!), though it is a matter of taking long way around. Go figure I couldn’t comment recently on two posts that I, for one, have real life experience… oh well.Don’t worry so much about the VC vs. Angel vs. Bootstrap… those that can pull of something bootstrapped are in a better position of ownership. Just remember, take care of any original Angel sources and you will come out better.

  78. leigh

    i’m glad i came late to this post …. i’m too frustrated in Canada with the whole cash flow issue. We just won a huge piece of business but the revenue won’t materialize for months and we have to float it until then. It just sucks. Occasionally makes us wonder if we should follow the money vs. our vision. But i’m now going to use @liad:disqus ‘s line (no revolution ever started…) next time i do the walk around the park with my business partner to clear our heads

    1. LE

      How much do you need to float and for how long?

      1. leigh

        I’m a way overly conservative and would prefer to have 8 m in the bank and we aren’t there yet. The bigger issue isn’t really current staffing levels — I’ve built up two companies of a similar type to this and bc i’ve done it before, I know when it starts to move and how fast it goes. That tipping point happened this week (and remember our co is a service not platform)Two biggest (maybe three) frustrations for me:1. We are getting world class corporations so we have to scale fast so you are always making calculated risks without committed but likely assumed dollars2. We want to be the first company of our kind who builds a platform underneath it. We have a structure for it through a couple smaller client prototyped projects. To build it, it’s investment dollars. 3. Number 3 related to the numbers 1 & 2 — Want to find the right business mentor (aka unpaid member of advisory board) to help us with these decisions.

      2. leigh

        Hey @domainregistry:disqus was there ever a reply to this? I replied to it a few days ago and just noticed on the disqus panel (that had recent activity) that it said you had replied but showed no reply from my disqus panel shows an answer to this but floating somewhere bc clearly it’s not here! weird.

        1. LE

          I had seen your reply “I’m way overly conservative” but I don’t think I replied to that?

  79. Mark Essel

    Bootstrapping has an aura of being strapped for cash, and building from nothing but one’s own effort (how do bootstrappers pay rent?)They work day jobs, or they self fund from other ventures. Working another full time job can pull focus away from building a company.Bootstrapping does help maintain ownership/control. And it makes ya smarter and confident that you can build a business. That’s a big deal.

  80. Guest

    Good post for two reasons:#1. From an investor standpoint, a bootstrapped business has more “proof” under it’s belt.#2. From an entrepreneur standpoint, I looked for funding for my web based medical office solutions ecosystem for about a year before deciding it looked like no funding was coming it’s way. Now after having worked on it as I get time (I’m going to call it version 2 soon), your post provides some hope that maybe someday I’ll find some funding to make the system a “real” competitor in the market.

  81. katellington

    I get it bootstrapping allows for the organic of growth of human capital within the organization.

  82. Patrick Dugan

    Worked in a Kushner funded start-up! After the end of their bootstrap phase, right at the start of growth. The grew like a red giant, swelling with helium, and are now ripe for HR raiding like a metals-rich brown dwarf.

  83. ShanaC

    But is this healthy? Is this a sign of flipping companies and too much PR?

  84. ShanaC

    on’t red giants normally last near forever/go nova at the end?

  85. ShanaC

    Nah. You’d be surprised.

  86. Kirsten Lambertsen

    I feel unmasked!

  87. Patrick Dugan

    Supernova was the 400 person lay-off and also an 8-fig settlement.

  88. Anonymous

    brutal truths!

  89. Elia Freedman

    All the companies that die with funding are barely talked about, too.



  91. Andy

    I love toast.

  92. Ryan Frew

    The toaster was totally revolutionary.

  93. LE

    Fred is from what I can tell a voracious meeting taker. Would be good to know some statistics on that. Rough guess would be 50 to 150 meetings results in one investment.



  95. fredwilson

    figure i take forty meetings a week. figure half are potential investments. so 1000 meetings a year with potential investments. i try to do two new investments per year. i did four last year. none this year so far. so two to three is about right

  96. jason wright

    “none this year so far”What’s the longest period you’ve gone without making an investment, and is it getting that much harder to find opportunities?

  97. wiwa

    40 meetings a week?! All that would make some very interesting visualization data. Like categorize and rate the meetings and show them on a big time line. You could visualize the tide of startup innovation / annovation, where ideas are pointing, etc. Kind of like a giant scoreboard for the startup game. Or your crystal ball, crystalized. API your VC.

  98. Emily Merkle

    maybe not “forget” the ones that lose entirely – but understand why & what can be done differently.

  99. jason wright

    It’s chaos.

  100. Emily Merkle

    Yes in fact, they can. Will they? Another matter entirely.

  101. Chris Johnson

    Paul -We have to try. We have to improve the world, glue it together and improve it.Iterate, create. Do it again.Loose alliances.

  102. Ryan Frew

    I’m with Emily, here. If it is a true startup, than the founders must be out to change the world. If the founding team doesn’t believe that their product can change the world than they will most certainly fail during the bootstrap phase. Even if they survive that, they won’t ever get funding without proving to investors how much they believe in their product. When I say “true startup” I am excluding businesses like a new restaurant.

  103. Luke Chamberlin

    You said “out to change the world” which is different than “change the world”.Only a few will change the world, but millions of people can be out to change the world at the same time.

  104. Emily Merkle

    One man’s disruption is another man’s ding in the universe.

  105. fredwilson

    two or three years is the longest. it is not that hard to find opportunities. our firm has made six investments in our new fund in the past nine months. that is about our pace, maybe a tad ahead if anything. i made four investments in all young companies last year. i’ve got a lot on my hands.

  106. fredwilson

    it would be a blur. like my mind at 7pm most days.

  107. Ryan Frew

    I absolutely don’t mean simply a web startup. I mean that someone who starts something relatively boiler plate, like a restaurant, simply calls it a restaurant. A restaurant owner is an entrepreneur, but a restaurant is not a startup. All good startups are out to change the world. This includes web, biotech, cleantech, new consumer products, new firms, and so on.

  108. Ryan Frew

    I see your point there. Good startups can totally be out to make cold hard cash. But, in the words of Simon Sinek, cash is a result, not a goal. If you don’t start with a good product, you’re not going to make any cash. And if you don’t believe that your product is good enough to change the world, you’re unlikely to get enough other people to believe in your product to the point that you’ll make that cold hard cash. Further, TOMS Shoes and Kickstarter are great examples of startups that truly set out to save the world and have made big money in the process.

  109. Ryan Frew

    Haha, Paul I totally agree that these companies are out to make cold hard cash. We have no discrepancies there. But are you seriously of the belief that GE, GM, or even JP Morgan didn’t start out with the belief that their products had the power to change the world? Just as this started: All startups are out to change the world.

  110. LE

    Kool-Aid. They don’t teach about the Jonestown massacre in school anymore.…Just think what a rare opportunity it is for the young people who haven’t had a sip and can see through all of this.

  111. JLM

    .It is not either-or. It is both-and.Change the world.Make a shit pot of money.Use the money to do good works..

  112. LE

    “A restaurant owner is an entrepreneur, but a restaurant is not a startup. All good startups are out to change the world. “Ryan – You graduated high school in 2009 and haven’t even graduated college yet you where do you get the chutzpah to try and define at all what a startup is?

  113. Emily Merkle

    This is all semantics…and there is a place for semantics, IMHO.

  114. Ryan Frew

    Have you ever heard someone say, “I just founded a new startup – it’s called Bob’s Bar and Grille”?Since when is age a determinant in who can have an opinion regarding what a startup is? Do you think Steve Jobs, Mark Zuck, or Bill Gates would have had reasonably worthy opinions about startups when they were 21?

  115. LE

    “But, in the words of Simon Sinek, cash is a result, not a goal.”Decided to look into this guy Simon Sinek who I hadn’t heard of.Turns out there maybe a little resume enhancement going on. His bio on Huffpo states he writes for NYT and WSJ, info that is repeated on his wikipedia page (which is where I found it). However while there is mention of him in the NYT he hasn’t written anything there. Zip with his byline.

  116. LE

    It’s not semantics. It’s like me spending a week in Brooklyn and trying to define what it is.

  117. Ryan Frew

    This is the best bio of him that I came across:…. It looks like he’s faculty at Columbia which is pretty impressive, although I didn’t know that. I didn’t even know that he’s made contributions or commented or anything in the Times. I was just quoting a brilliant TED Talk that he gave and that has received a lot of fanfare. Worth checking out:

  118. Ryan Frew

    Is someone who is 50 years old who has never founded a company more entitled to an opinion regarding startups than a young person who has founded a company?

  119. LE

    “Have you ever heard someone say, “I just founded a new startup – it’s called Bob’s Bar and Grille”?”Have you ever heard the expression “wet behind the ears”?Age? I graduated from Wharton’s entrepreneurial program before you were born and have made a bit of money actually doing something. Back when I was your age I kept my mouth shut, listened, and learned from people who knew more than I did.

  120. Emily Merkle

    Yes. Win-win.

  121. Emily Merkle

    Yes. Win-win.

  122. Emily Merkle

    Yes. Win-win.

  123. Emily Merkle

    Yes. Win-win.

  124. Emily Merkle

    Yes. Win-win.

  125. Emily Merkle

    Yes. Win-win.

  126. Emily Merkle

    Yes. Win-win.

  127. Emily Merkle

    Yes. Win-win.

  128. Emily Merkle


  129. Emily Merkle


  130. Emily Merkle


  131. Emily Merkle


  132. Emily Merkle


  133. Ryan Frew

    Haha, LE, I never implied any of what you’re really seeming to take issue with. I did not question your age. I did not question what you have accomplished in life. I’m sure that you have made a bit of money and I’m sure that you have done quite a bit. I visit this blog every day. I probably comment once a month. In my opinion, that’s a reasonable level of “Keeping my mouth shut, listening, and learning from people who know more than I do”. You are one of the commenters who I frequently learn from. But are you really this upset that I don’t personally consider a restaurant a startup? I stand corrected. I am very apologetic for that offensive comment of mine.

  134. LE

    Fascinating. They have lumped in “writing and commenting” into one paragraph which makes it seem much more important than it is:Additionally, he has written and commented for local and national press, including The New York Times, Wall Street Journal, The Washington Post, Houston Chronicle, FastCompany, CMO Magazine, NPR and BusinessWeek.All this coming from a program in of all things “Strategic Communications”. What irony.I’ve also “commented” for the NYT and other places. They’ve quoted me. So I guess I can wrap a paragraph summary to give people the impression that I actually write things for the NYT and those other places even though I’ve only been quoted.

  135. LE

    The “startup” world is very forgiving. People like Fred, the angels etc. think differently than the world you will be in if your startup fails. In that world you have to behave differently or you may come across as a fool. But since you have shown the proper amount of deference to a person senior your age there is hope and I will recommend Fred invest in you when he asks my opinion.

  136. Ryan Frew

    Yeah, those are some bad bios. Hopefully Yahoo! never hires him as CEO

  137. Ryan Frew

    Sounds great. Although I wish I would have gotten your opinion earlier, because I just wasted $60 on a domain registration a few days ago after totally took advantage of me.

  138. Emily Merkle

    …yes we can.