27. Is bootstrapping a sign that you can’t raise VC? Is it the worst case scenario? Is it a sign that you need to work on your value proposition? Does bootstrapping harm growth potential and impact scale? Well, first, don’t get caught up in TechCrunch posts: because in an ideal world, bootstrapping is 100% the way to go. Because you get to own 100% of the company. Venture capital has many advantages but it also begins a long path to potentially massive dilution. For example, most SaaS companies that have gone public recently have ended up selling 80-90% of the company to the VCs, plus often another 6% or so to an outside CEO, in many cases that doesn’t leave much room for everyone else. Having said that, many business models simply require outside capital to scale, in particular in SaaS, complex products with a sales-driven model and in consumer, models that require huge critical mass pre-monetization. If you can’t raise venture capital for these plays you’ll likely be doomed not just to a niche existence but potentially stay sub-scale too long and stall out in the marketplace. For these models, bootstrapping can be a bad sign. SAASTR.COM 25