Bootstrapping Business: Saying No to VCs

We were recently featured in a Crunchbase article titled Bootstrapping Business: Why More Startups Are Rejecting VC Gold

ArdvarkCompare CEO Jonathan Breeze writes about 3 crucial reasons startups like Algo.ai either don’t accept or don’t pursue VC funding. 

1. It can be a waste of time

Pursuing funding can be a full-time job and many smart CEOs choose to keep their attention on running the business instead of spending money fundraising. 

2. There are pressures of hypergrowth

Accepting VC money usually means expectations of fast growth at any cost, and many startup founders are starting to eschew this option in favor of retaining control over their companies vision and growth trajectory.

Algo.ai Co-Founder Nikki is quoted as an example of companies that have turned down funding for this very reason: “We wanted to maintain control of our company, our vision, and culture,” said Nikki Hallgrimsdottir, co-founder of Algo.ai. “We were also lucky to have paying customers right from the start who believed in us.”

3. The need for follow-on funding

Securing more funding rounds can become a vicious cycle, and if the hyper growth that investors expect isn’t realized companies can face down-rounds, or simply die because they can’t secure a new funding round. This put’s your companies’ future in the hands of potential future investors rather than existing stakeholders such as the founders, leadership, customers, and employees. 

 

Clearly, there are different reasons founders bootstrap, and the reality is there is no one-size fits all formula for founding and funding a successful startup. We at Algo.ai are proud of our bootstrapped journey and the customer-centric reasons we have chosen to say no to outside investors up to this point.

You can learn more about how we came to be in a position to bootstrap successfully in the enterprise space in a recent interview Amjad did with Sramana Mitra of One Million by One Million

 

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