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Comment by blantonl | Hacker News Reader

Bootstrapped startup owner here... I am of the opinion that if a business on the Web needs millions of dollars to get off the ground, then it's probably a business that isn't worth getting off the ground.

I realize that there are exceptions and there are ideas that need funding to get going, but the whole incestious culture of venture capitalists, investors, and startup idea owners often doesn't foster real innovation. It instead lines the pockets of a select few with millions of dollars. Just a slick redistribution of wealth.

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if a business on the Web needs millions of dollars to get off the ground, then it's probably a business that isn't worth getting off the ground

There are some businesses that you could simply not start without significant upfront investment. True, there are lots of businesses you could start with just very cheaply ($100's or $1000's) and grow organically over time. The easiest of these would be paid online apps/services where you could scale your expenses (servers, bandwidth, etc) with revenue. But some businesses need money upfront to get started. The most obvious example would be anything involving hardware. You could bootstrap while building a prototype, but you would likely need outside investment to manufacture and distribute your product. Even a web only business might need lots of investment to break into a market through advertising or partnerships.

That's completely true, but I think you missed the point. Most startups still focus on finding funding. People seem to think that's the right way to do it, maybe because that's all you read about on tech blogs.

I agree that many startups focus on getting funded as an end, rather than a means to a greater end. I think investment should be seen as a force multiplier, something that will get you to your goal (market dominance, acquisition, IPO, etc) faster than you could without it. I think startups could use more advice on when and if it is appropriate to seek investment or bootstrap, but I don't agree with the sentiment that startups should avoid investment like the plague.

Not like the plague, but it shouldn't be first priority. On that point, I think we're saying the same thing.

I'd argue the end goals you mentioned can be harmful to the startup itself (not to mention the tech community), but that's a different debate. If your goals start smaller, you don't need funding in most cases.

I couldn't agree with you more; it doesn't take millions to build an innovative product that actually helps people. Of course you'll run into hugely successful companies like Gilt that require significant upfront capital, but no real innovation is going on there. Yes they have a great business model and great execution going on, but if your mindset is that you need millions to go after a big idea, you're probably thinking the wrong way.

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