Do I Need To Raise Venture Capital At All? No. But It Takes Longer If You Don’t.

Q:  Is venture capital really necessary to do a start-up?

Maybe it isn’t.

  • Squarespace’s solo CEO managed to go years without taking any investment at all. It will soon be worth $15B+. And he’ll be worth $5B+. More here.
  • Atlassian never raised any primary capital and waited many years until raising money at all for secondary liquidity. Today, Atlassian is worth $56B and the two co-founders own 70%. More here.
  • Mailchimp got to $1B+ in ARR without raising any money at all. More here.
  • UiPath went 10 years without raising much more than a tiny seed round. Today, it’s worth $30B and the founder owns 30% and is worth $6B. More here.

But here’s the thing. It takes longer this way. UiPath took 10 years to get to $1m in ARR! Squarespace took years to get to any material revenue. Atlassian took years longer to get to scale.

So if you have enough time, and can self-fund yourself to the first few million in revenue — maybe do it. There are plenty of success stories here.

But most leading SaaS companies raised money, at least as soon as things took off. Because if nothing else, they wanted to go faster.

A bit more here.

Published on April 24, 2021

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