Thoughts on bootstrapping and pursuing non-VC funding to build a software startup? Trying to think creatively re fund raising and recognize there are multiple paths to building a company, and all paths don't lead to VCs. Pros and cons?
Plenty of avenues to take in crypto: grants, accelerators/incubators, and angels. Big pro: Institutional interest (professional backing) Big con: giving-up large % of equity/tokens; dealing with additional shareholders
I am a fan of bootstrapping, so far we have built truts.xyz without any VC money and we have literally surpassed our funded competitors who raised multiple millions when it comes to tractions, users, DAUs. So yeah, it can be done, only the road is harder, since you can't do capital heavy experiments.
Big pro on bootstrapping is flexibility. You can take your time to figure it out and get things right AND THEN take VC if it’s the right move. Once you take VC it’s hard to get off the hedonic treadmill of it.
Maybe it's my immigrant parents' mentality, but I lean towards bootstrapping and getting paying customers as soon as possible, purely for the independence that this affords. If you do decide to raise via VC later, it helps to show them that you've got paying customers already.
Pros: - independence - fundraise later at higher valuations if you achieve traction - your conviction & willingness to bootstrap are a major proof point for VCs Cons: - risking your own capital - capital limitations require you start the company with the absolute right people My quick brainstorm on the subject :)
VCs often offer also guidance, which is sometimes valuable at the start. But to stay independent is a really nice goal also.