Comments
"Now the same question seems to be coming from a position of customers trying to determine how much of a risk they're willing tolerate when doing business with VC-funded companies."
To be fair, this was one customer's question, not necessarily a trend.
The merits of taking VC are debatable. But I don't think we're at a point where potential customers broadly are skeptical of a funded startup. If nothing else, it means someone, somewhere has vetted you and thinks you can deliver.
By Yoric 2025-03-198:10 As a nuance: the VC thinks you can deliver to them. It's not necessarily the same thing as delivering to your clients.
By penguin_booze 2025-03-197:30 There are merits, but one way to look at VC is as a predatory lending firm.
By light_triad 2025-03-190:267 reply It's a bit of a non sequitur: having a profitable business is ideal but if a startup can grow fast with VC money it can be acquired for 40x (Wiz) - 1000x (WhatsApp) revenue even if not profitable
Why does it always have to be about maximizing exits at all costs?
There's people that simply enjoy their company and working in it, they only luck to sell when they are old and there are no great heirs to the business.
And that's true for billion dollar companies too.
Bootstrap = chance of failure, more work because you can't hire a team to do significant amount of work for you
VC-funded = Full Salary early, network for future jobs if company fails, shortcuts like joining an incubator and selling to your cohort for early sales figures (which can then be used to get more money)
VC funding is for sure less personal risk, but I don't think the other points are universally true.
1. Re: hiring, you're probably not going to hire your first FTE right after raising money. You're probably going to do so after getting a bit of traction. I hear most investors especially today will push you to be lean and do more yourself. Either way, bootstrap or VC funding, you're going to bust ass, no way around it.
2. Re: salary, yes, some investors will encourage you to pay yourself, but you're probably not paying yourself a "full" salary right away.
3. Re: selling to cohorts is a bit overrated I think. The fact of the matter is, they're probably all early-stage tech startups, which means if you don't have a product that specifically targets early-stage tech startups, you're probably not going to sell to them.
I don't think it's as cut and dried as X is better than Y. It really is all about how much risk you want to take on, if VC funding is even an option.
By JohnFen 2025-03-191:44 > network for future jobs if company fails
This is also a thing you get when bootstrapping, if you're bootstrapping correctly.
By bb88 2025-03-191:23 On 2, I've seen this go the other way. The capital is going towards the business and not the (maybe questionable) lifestyle of the founders.
Once it's a full fledged business with a steady income stream, an above average salary would then be warranted.
By epolanski 2025-03-1912:07 VC-funded: you give up equity and control
By soup10 2025-03-190:40 many businesses are boring or a grind by their nature and would not exist without financial incentive and an exit plan
By altairprime 2025-03-190:30 A startup that doesn’t care about making money is a startup that will ignore negative customer feedback if addressing the concerns raised would slow the unicorn’s growing phase. If you’re a stable business, that’s the sort of firm you definitely do not want to hire for key services; the VC involvement is too high an instability to permit. (Advertising is not a key service.)
By nothercastle 2025-03-190:391 reply Can but most will die trying. The customer will get screwed either way. The VC sees growth or die, the customer gets die or suck. Loose lose for the customer
By OutOfHere 2025-03-192:49 It is why a customer ought to prioritize open source and open everything even if the customer is paying a vendor for support or a service.
By taneq 2025-03-191:18 I’d think ‘profitable but investing revenue in growth’ Is very different from ‘increasing revenue purchased with investor money’.
Being profitable means you’re not beholden to new investors. If your goal is to run a company rather than race for an exit, this lets you make much longer term strategic decisions.
By pavel_lishin 2025-03-191:18 > if a startup can grow fast with VC money it can be acquired for 40x (Wiz) - 1000x (WhatsApp) revenue even if not profitable
How does that help me as a potential user?
Maybe I'm just saying what VC wants me to say, but if it's the sort of business a VC would invest in, you need to worry about a competitor blitzscaling over you.
By nothercastle 2025-03-1917:31 That’s true but interests of customers are orthogonal to the vc interests
By mmaunder 2025-03-190:34 VCs are diversified. Founders are not. Their math checks. Yours does not.
By MortyWaves 2025-03-191:06 I’m expecting this post to vanish from the home page any time now
