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Comment by timmm | Hacker News Reader

This is why I fundamentally don't like investments. This is why profitability is king. Not users, not revenues, nothing except profits! This is why self funding is so important.

In life there is a right way to do things and a wrong way. The 37 signals (bootstrap) model is the proper way to do web business. Taking other people's money is the wrong way.

To author: Dude, you probably care more than the investors. Make it into a good thing, raise awareness on why the investing model should be approached with trepidation and skepticism. Then move on.

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ugh

Maybe...maybe not. Sometimes capitalization is what your business really needs. Sometimes it isn't. I can provide a whole list of "web businesses" that bootstrapped to profitability, but I can come up with an equally impressive list of companies took really significant capital. I can certainly find businesses that would have not succeeded without the capital to sustain them through their early years (I experienced that first hand) ahead of their ultimate success.

Smart entrepreneurs know how to be strategic with their fundraising. They know when to take money, and (just as importantly) when not to. They know that at key moments a capital infusion can propel a company to big growth. They know that at the wrong moment money can be the distraction that keeps them from executing.

I have a huge issue with your post. You're wrong. Experience has shown me that funding can be a huge asset, except when it's not. It's what makes entrepreneurship so incredibly difficult. Funding, and the way you pursue it, are really tough to choices you have to make. After which you have to live with the consequences. To reduce it to "In life there is a right way to do things..." shows a real lack of understanding of that challenge.

Second this. Bootstrapping is great, and it's even underrated. Most people raise too much too early, and it ends up hurting them. In the end VC capital is a tool though, and you can use it well.

One position from which raising money might be a good idea is when you have a product that is already scaling and shows strong product/market fit, and you know (know, not think) that going 10x on spending is going to let you grow a lot faster.

Cool you could provide a list of exceptions to the rule. Aquisitions, IPO, Unsustainable Co's., and companies that fund themselves through continuous investments are exceptions to the rule.

I don't get why web business people want to change the way business had been done for all of history.

You make a product, you sell it, you use that money to grow. Don't dilute that process, and if any key part of that process is being omitted you should be very skeptical.

Feel free to reach out and drop a line, you aren't alone and shouldn't feel like it. It's only failure if we fail to learn positive lessons from an experience.

It seems old fashioned, but the business model part of a startup is often the trickiest and the most unknown -- and worth figuring out, because ultimately the go hard or go home mentality.. goes home when they're cut off, or run out of cash. Faking it till you make it saying things are "great" like everyone leaves you where everyone ends up -- going home. Having real people around, not full of phony killing/crushing-it-isms is worth more than funding in a lot of ways, a good group of peers helps pick you up and keep you going.

To the poster, thank you, you're brave in being open and honest so those disillusioned by this kind of thing can't look away and flinch. Take your lessons forward and build something to take care of a problem that others want solved as well, not focused on the goals of investors.

If you restrict yourself to only doing things the "proper way", then you are going to be competing with people doing it other ways, including what you consider to not be the proper way - taking investment to go for hyper growth before profitability. Can your bootstrap startup compete with a startup that has outside funds to hire more than you, market more than you, release more often than you, and learn more than you? I've noticed even the rich people with 1 or more big exits behind them here in SV often still take investments for their next startups. They don't lose all their money if things go wrong, and their investors pull a strings to help them, since they have money in the game. You lose a lot of advantages when you reject investment, and you can end up risking a lot more.

Again your just exposing that you value the wrong things.

Who cares about growth? I don't. Not when it means I need to compromise my board, take on debt, ect.

I don't know how else I can get the point across but all you should care about is profitability.

And again those big deals are such a small percentage that you shouldn't even plan for that. Just make a profitable company.

I'd rather be profitable at a significantly smaller scale, because this isn't a sprint and in the end you actually have sustainability.

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