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20
September
2024
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There are three things that funded companies can get that bootstrap companies can't:
- Discounts
Companies in our tech stack, such as HubSpot, AWS, and Stripe, offer major discounts to funded startups, which we at MEDDICC are not eligible for because we haven't taken funding.
- Banking services
A bank (formerly) known for serving startups was discussing the services they could offer us and mentioned that they could not provide us with any lines of credit because we had not taken funding, despite strong growth and having always been profitable.
- Applause
It has always amused me that we celebrate when companies receive a round of funding. I get that it can be an exciting moment for the company, and it is validating that experts like VCs believe enough to back themβ¦
But you wouldnβt clap for your friend if they told you they'd had to take a loan to pay their bills.
How about instead of a TechCrunch article that says, 'πΌπ½πΎ ππͺπ¨π© ππ‘π€π¨ππ π $ππ¬π’ πππ§πππ¨ πΌ' (which actually means ABC just sold 30% of equity), we saw articles that say, 'πππ πππ©π¨ $π±π’, ππ£π ππ¨ π₯π§π€πππ©πππ‘π!'
Surely if you are a tech journalist, that is where the real stories are? I am not trying to throw shade on funded companies. But can we all agree that the profitable company that hits a $5m ARR milestone has a more interesting story than the company that burned $4m in seed funding to get to $3m?
I sometimes think being bootstrapped comes with a stigma. People assume just because you haven't raised money, it's because you can't.
Perhaps the word 'bootstrap' has a PR problem? For years, I thought it was related to some sort of 'shoestring budget.'... π 'Bootstrap' kind of sounds similar.
But actually, the term "bootstrap" originates from the phrase "to pull oneself up by one's bootstraps," meaning to improve one's situation by one's own efforts, without external help. Ironically, the phrase makes no sense, as it's impossible to lift yourself up by your own bootstraps. But perhaps that is the pointβhighlighting the idea of achieving something difficult or seemingly impossible through self-reliance.
At worst, 'bootstrap' should signal that the company emphasizes self-sufficiency and resourcefulness; at best, it should signal strong customer demand, a great product and team.
Is it time for a change? Do we change the phrase from bootstrap to 'profitable' or 'customer funded'? Or should bootstrap founders just get back to writing code from their mattress on the floor while eating ramen noodles?
