Writing the book Billion Dollar Unicorns a few years ago took me through the extensive process of talking to entrepreneurs who have built tech companies with valuations above a billion dollars. While there is a tremendous amount of serendipity involved in any extraordinary success story, one theme came up repeatedly: Bootstrap first, raise money later. I was particularly excited to share this nugget because it applies broadly to all classes of entrepreneurial ventures. The bottom line is that this strategy gives entrepreneurs more control over their destinies. Thus, even serial entrepreneurs often use this strategy, not just first-time entrepreneurs. Entrepreneurs, please have a listen to the following selection of inspiring and instructive 30-minute podcast interviews with the Founders of some of my favorite “bootstrap first, raise money later” success stories.
Fred Luddy, Founder, ServiceNow – Fred is Founder of one of the most successful companies in the history of enterprise software. Founded in 2003, ServiceNow is valued at over $12 billion in the public market. This is a truly wonderful discussion, marked with Fred’s warmth, humility and wit.
Greg Gianforte, Founder and CEO, RightNow Technologies – Greg took his company public, and later sold it to Oracle for $1.5 billion. He made an unorthodox choice of building the company mainly in Montana. Today, RightNow (now Oracle) is one of Montana’s largest employers.
Ratmir Timashev, CEO, Veeam – This is Ratmir’s second venture, so he had some money to bootstrap with. Consequently, Veeam avoided taking any venture capital and grew organically till about $200 million in revenue. Today, Ratmir has taken some money, but only to give himself and his co-founder some liquidity, and access a network to find adjacent product lines. Ratmir also discusses how he has structured the investment such that the company doesn’t need to exit. Very interesting!
Rene Lacerte, Founder and CEO, Bill.com – Rene is also the founder of PayCycle, a SaaS payroll company catering to small businesses with fewer than 20 employees that was acquired by Intuit. Bill.com has raised over $120 million in funding. Rene and I discuss strategies and nuances of selling solutions to small businesses, and the nuances of Do It Yourself SaaS, Do It For Me SaaS Enabled BPO, and Do It With Me, a hybrid of the two. If you’re working on a SMB solution, this is an important discussion to listen to.
Henry Schuck, Co-founder and CEO, DiscoverOrg – Henry is a first-time entrepreneur who has bootstrapped his company to $25 million ARR, and then raised private equity financing from TA Associates. Henry sees a clear path to $100 million. Very inspiring story!
Therese Tucker, Founder and CEO, BlackLine – Therese is a very successful female entrepreneur who followed our core philosophy – bootstrap first, raise money later. When I first met her in 2009, her company was in the $10 million revenue range. Subsequently, it has continued to grow at 50% CAGR year over year, and Therese raised private equity funding in 2013 to take liquidity for herself and her team. With annual recurring revenue in the $65 million range, and continued growth at 50%, $100 million revenue is not far in the horizon.
Ashik Ahmed, CEO, CTO and Co-founder, Deputy – Ashik Ahmed, CEO, CTO and Co-founder at Deputy, discusses how he bootstrapped his venture from Australia to $10 Million in revenue and then raised $25 Million in financing from the US.
Raj De Datta, Co-founder and CEO, BloomReach – Raj bootstrapped this e-commerce personalization technology firm to over $5M in revenue before raising its first financing. Raj speaks of sensible fundamentals as opposed to irrational exuberance around Unicorn mania.
Heidi Jannenga, Co-founder and President, WebPT – Heidi is a scrappy entrepreneur who managed to bootstrap to over $1M ARR and THEN raised the first million in angel funding.
Girish Rowjee, Co-Founder and CEO, Greytip Software – Girish Rowjee, Co-Founder and CEO of Greytip Software, discusses his long journey selling HR and Payroll software to the Indian SMEs. Greytip is one of the two successful SaaS companies in India who have managed to penetrate the mid-market.
Ross Mason, Founder, MuleSoft – Ross has built a terrific commercial open source company that is scaling at Unicorn rates, with freemium conversion rates in the 5-6% range. Ross discusses how he got the company off the ground, and built a product strategy that makes such high conversion rates possible.