Over the past decade, venture capital has become synonymous with entrepreneurship. Founders from around the world arrive in Silicon Valley with visions of record-setting A rounds and billion-dollar valuations. But what if you don’t have unicorn dreams – or you don’t want to pursue VC money?
Bootstrapping a SaaS company is not only possible – I believe it’s a saner, more sustainable way to build and scale a business. To be clear, bootstrapping isn’t always easy. It requires patience and focus, but the freedom to create a meaningful product, on your terms, is worth more than even the biggest VC check.
I started my company, JotForm, in 2006. We’ve grown steadily from a simple web tool into a product that serves more than 8 million users – without taking a dime in outside funding. We’re profitable in an industry with big-name competitors like Google.
Most importantly, I still love this company and its mission, and I want the same for my fellow entrepreneurs. If you’re a SaaS founder who’s wary of VC funding, here are my best bootstrapping tips.
Keep your day job
Success stories from founders who leap blindly into business without resources or relevant experience are compelling, but they’re the exception, not the rule. Working inside another organization can build your skills, your network, and even inspire great product ideas.
After finishing college with a computer science degree, I worked as a developer for a New York media company. The editors always needed custom web forms, which were tedious and time-consuming to build. I kept thinking, “There has to be a better way.”
That daily frustration led me to start JotForm – but I didn’t leave my job right away. I stayed with the media firm for five years and worked on my product on the side. By the time I was ready to go all-in, I had the confidence, experience and savings I needed.
Many of the world’s biggest companies began as side projects, including Twitter, Craigslist, Slack, Instagram, Trello, and a little venture called Apple. If your day job doesn’t pay enough to fund the early stages of your business, consider a side gig or consulting work. There are so many ways to set yourself up for success without the pressure of VC cash or selling a chunk of your business.
Know you’re not alone
The exact numbers shift every year, but data compiled by Fundable show that only 0.05 percent of U.S. startups are backed by VCs. Another 0.91 percent are funded by angel investors. The vast majority, at 57 percent, are funded by credit and personal loans, while 38 percent get funding from friends and family.
It may feel like most founders raise multi-million-dollar rounds, but that’s simply not the case. It’s also good to remember that securing VC money is complicated and time-consuming. You can spend months taking meetings and presenting the perfect deck – and still leave empty-handed. Be patient and stick to your own path.
Measure profits, not popularity
SaaS founders often emphasize vanity metrics, like user acquisitions and total downloads. These numbers can measure short-term popularity, but they don’t reveal how users and customers feel about your product – or your long-term potential.