Q: What are some of the advantages and disadvantages of bootstrapping?
The biggest disadvantage is generally, it seems to take longer in SaaS at least. Often about 4 years longer:
Bootstrapping in SaaS? It Works. But Add ~4 Years to the IPO Timeline. | SaaStr
The iconic bootstrapped and semi-bootstrapped (i.e., waiting a long time to raise) companies in SaaS just took longer to get to $100m ARR:
In fact, only 7% of the Forbes Cloud 100 unicorns and pre-nicorns bootstrapped:
The Average SaaS Unicorn Raises $370,000,000. And Bootstrapping is Rare. | SaaStr
But … for those that did bootstrap successfully, in the end didn’t matter in the end. They grew just as quickly — once they got to $10m ARR.
So if you can do it, do it. You will own so much more.
But if you can raise capital, and you use it correctly, you can get to the first $10m ARR faster. At least to the first $10m in ARR. Does that let you beat the competition? Fund a real sales team? Do more partnerships?
If so, then raise.
1Password partners with Accel for continued growth | 1Password