Dear SaaStr: How Hard Is It To Get to $1m ARR Without Investors?
My learnings are three-fold.
First, it depends on the team.
Most of the SaaS unicorns have been built on at least some venture capital … but a number haven’t. Atlassian ($30b market cap), Qualtrics ($12B), Mailchimp ($12B) etc. have gotten there without it.
The real question is How Lean Can You Be. And it really helps to be in a slower-evolving category if you are bootstrapping.
Second, most bootstrapped SaaS companies grow slower in the earlier days without capital to boost them to Initial Traction and Scale.
Atlassian and Qualtrics and Mailchimp took an extra 3–4 years to get to Initial Traction and Scale vs. some of their peers.
But …
Third, once any SaaS company hits $8-$10m in ARR or so … they all grow at the same rate.
As Ben Chestnut of MailChimp put it, at first no one wanted to fund them. But once they didn’t need any funding, the VCs all wanted to fund them 😉
So if you can suck it up, and somehow, with a super-lean team, get to $10m ARR … then that’s another great way to get there.
Especially in a less competitive space, where a little extra time getting there isn’t the end of the world.
A related post here:
It probably depends on whether or not you count yourself as an investor, and what value you can personally add to the mix. Then it’s only about how much you have saved up to get you to any sort of revenue. If you wish to remain bootstrapped, you could then do an A/R type loan (NOT FACTORING), to help you make shorter term investments in growth. In the second company I started with the same co-founder, we had a reasonable amount of savings. However, our personal investment might be look at as being a self-Angel (given the amount put in prior to first profit).