Raising a Very Unusual Round of Funding and Open-Sourcing Our Docs
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It's great that he is sharing his documents, however, the chances of anyone who hasn't already raised $20M+ from VCs (and/or created popular videos for 10+ years) ever following in these footsteps are slim-to-none.
If you really don't want to raise money from outsiders, just don't raise money. Many people launch businesses with very little money. Some of us win, some of us lose. If you're in a position to raise capital from 30 "somewhat" high-profile entrepreneurs/investors, congratulations! You should probably do it!
But if you're not in that position, do it like Rand did from the beginning. Work your butt off and make things happen. Then someday (hopefully), you can post your own humble-brag on your blog.
> If you really don't want to raise money from outsiders, just don't raise money.
This sounds like it’s perpetuating a false binary between VC and bootstrapping. This probably works in VC‘s favor, but not individual founders’ (on average).
PS - Basecamp is another ex of a tech co that raised money from non-VC investor(s) (Bezos) who got dividends—not a payday on an exit.
Your pushback = really good point. Personally, I wouldn't recommend that anyone tries to raise $25-$50k, as their odds of hurting a really good relationship will be at about 99%...but I understand what you're saying.
My advice is that if you are thinking about raising under $500k, or only raising money from family and friends, just go through the struggle as a bootstrapper. You'll learn a lot more and probably get further than you would with the friends and family money. Plus you'll still have a place to crash and be welcomed to a warm meal from time to time, if needed.
Of course I say this as someone who was never able to raise capital. So, my bias is what it is. I'm a bootstrapper. Good luck, Rand - wishing you the best!
My only concern would be: is this a one-off use product?
Perhaps if there was a sort of simple CRM to track relationships with influencers, it would make me come back more
With Indie.vc, I have the option to distribute profits back to the investor as a viable, realistic option between "Be the next Google" and "Spend all the money and die".
I hope more start-ups pursue deal structures with these kinds of options. Building a business to millions or tens of millions in revenue should not be considered a failure. (But it would be perceived a failure in traditional VC deals.)
We're bootstrapped and profitable. Unfortunately we incorporated as a Delaware C Corp because we didn't know we wouldn't raise.
If non-VC were more normalized, like Rand thinks maybe it should be, it probably would have saved us a bunch of money and hassle from the get go. I also think the expected return as a founder is probably better if you don't shoot for the extremely unlikely event of building a billion dollar company in 5-7 years.
I'm rooting for you Rand! Btw I finally moved our blog over to a subfolder like you suggested. Keep up the awesome work, can't wait to try SparkToro.
I wish there was a crowdfunding platform that made investments like these more accessible to the general public, similar to Republic.co but without that need for an exit to get a return on your investment.
I do wonder what the top line valuation was for the round, aka what ownership stake does this $1.3M represent. I think that's a key clause esp when the company might pursure a lower growth but more sustainable option. If they have models it'd be interesting to discuss them for sure.
Bootstrapping the first company as a nobody may be the more interesting tale here ;)
But thanks for sharing, rand! Am also currently researching Carta, CapShares, TrueEquity, etc. and this is insightful.
Not everyone can raise a seed round this way. Most founders from modest background really can't raise 1m from their friend circle.
The kind of surity i see around this is only possible if you've already tested water or if you've access to some advantage.
I guess it's a product like similarweb and collects data from ISP dns resolvers, browser extensions and wifi points. Some consultants are selling this as a package now and only thing you've to add is your marketing and face to it.