Last week there was a post on Business Insider that asked the question: Why Do We Praise All Startups When They Raise Funding.
It’s a reasonable question.
A few thoughts come to mind.
First, it’s a big deal when a startup raises money. It’s a result of a lot of hard work and sacrifice by the founders. It’s also a select group of founders that can raise capital. Most startups that try to raise capital, aren’t able to do it.
We should support entrepreneurs and root for their actions. They are living in a world of non-believers and they are trying their best to make it happen. Against all odds.
We all know, that funding does not equal success. That’ not the point. We are just happy for their progress and are recognizing that.
However, the one thing that we don’t do enough of in startup land, is recognize startups that choose not to raise venture capital.
Not every startup should raise outside capital and some entrepreneurs choose to bootstrap. We should celebrate those folks (for the most part we don’t).
Here’s a good example. Wayfair, formerly CSN Stores. The founders Steve and Niraj built the company from scratch and bootstrapped it for 7 years growing it from zero to over $300M in revenue last year. This year they will likely do $500M in revenue. The company received very little media attention for those 7 years. We led the Wayfair’s first found of venture capital earlier this year. Amazing story and an amazing company.
Here’s a partial list of some of my favorite startups that have chosen not to raise venture capital:
Instapaper. I met Marco back in 2007 when he was working with David Karp to start Tumblr. I’ll never forget that standing desk he built which was propped up with dozens of soda cans. Shortly thereafter he created Instapaper and never raised money. And he has a business model that works. I love Instapaper. Its focused, it’s beautiful and it just works.
Sanebox. I’ve known Stu for almost 10 years. He’s one of my closest friends. Sanebox has made email usable for me. It’s a complete game changer. I’m pretty sure I’m the very first user on the service. Stu and his team has consistently made the product better and better. I can’t imagine using email without Sanebox.
Agilebits. This the company behind 1Password. I don’t know the team. But I use their product everyday. I might be wrong but to my knowledge they haven’t raised any venture capital. I love 1Password. I use it on all my Macs, my iphone and my ipad. It’s fantastic.
This is not meant to be a complete list obviously. But it’s a start. And I’ll make sure I talk more about more great things being built by founders that make it happen on their own.
It’s extremely impressive and we should celebrate those folks too.