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Comment by kozikow | Hacker News Reader

Maybe the logic is another way around? Companies that have a clear product-market fit and generate enough revenue to self-fund and don't have competition closely behind their backs have much less reason to raise.

Maybe you are mistaking "They were so successful, so they didn't need to raise" with "they didn't raise, so they were successful".

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As a fairly successful bootstrapper, I'd say that it's more likely that taking money generally leads to a "runway" in that you need to be profitable or raise another round by the end of that runway. Many don't succeed in either of those efforts because they tend to take on heavy expenses too early, where a bootstrapper is much more thrifty and mindful of cash flow.

In the early days of my company, I applied to YCombinator, was a 2x Techstars finalist, and pitched Fred Wilson at USV's office. Rejected by everyone - but honestly, if I'd taken their money I probably would have mismanaged it and brought the company to an early end.

Great point. This is why I advocate for taking money early on, but only increasing burn when a profitable business model is found.

This is the best of both worlds.

100% agreed, and that's essentially the advice present in Mark Suster's blog post "Do You Really Even Need VC?" [0]

[0]: https://bothsidesofthetable.com/do-you-really-even-need-vc-7...

No doubt that may be true, but if a company doesn't have a clear market fit, how will more cash solve that? It just extends the opportunity to find such fit.

I don't doubt that investment money thrown at the correct product can spur it along. However, I believe most investors are looking for long shots, or returns better than the stock market. To obtain those type of gains, they will invest in the companies that can go boom or bust.

In contrast, the company that doesn't take money is incentivized to simply not go bust (even if it grows more slowly). They have to be cautious, keep their customers and grow. It's a requirement.

That being said, I don't disagree with you. Perhaps, I'm completely wrong in gneral, but from my circle of friends that appears to be the case.

You may also be missing the fact that VCs need big exits to be successful. It's very possible that the 2 businesses that are successful just didn't have the percieved potential to be unicorns. I keep hearing rumor that the term 'lifestyle business' has started to take on a pajoritive tone in certain circles, and I suspect it has a lot to do with how little interest the owner has is big growth. I personally would probably never try to get VC funding since my goal in business is always to not work, and big growth requires way more effort than it's worth.

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