What's 🔥 in Enterprise IT/VC #222
🥾Bootstrapping works, the value of constraints + the scrappiness of not raising too much 💰, Qualtrics, Calendly...
Ed Sim | Jan 30 |
What's 🔥 in Enterprise IT/VC #222🥾Bootstrapping works, the value of constraints + the scrappiness of not raising too much 💰, Qualtrics, Calendly...
Many of my weekly updates include financings for enterprise startups not because that is the end goal, but more because capital allows startups to grow and to use as a proxy of how companies may be performing. That being said, not enough is written about bootstrapping 👢. This week 2 initially bootstrapped companies had significant funding events (there it is once again!) as Calendly raised at over a $3 billion valuation and Qualtrics went public and is now at a $27 billion market cap. Both were bootstrapped and both, not coincidentally, were in underappreciated markets which drew little venture capital funding back in the day. Calendly was started in Atlanta/Ukraine and Qualtrics in Salt Lake City, Utah. Before diving into Calendy and Qualtrics, I was curious about the origins of the word bootstrap so here it is from Wikipedia.
The key point for startup founders is “to better oneself by one's own unaided efforts” or no capital. I was talking to a fellow investor the other day and what scares me the most right now is zero stage startups raising too much capital outside of the gate. Necessity is the mother of all invention and when life is too cushy, one can lose that scrappiness. Trust me, having been through the first bubble in the late 90s, I’ve seen and been a part of that. Ryan Smith from Qualtrics talks about the DNA that was forged in the early days from this 2015 interview:
Tope Awotona from Calendly talks about his early days - yes, a lack of money forces one to find a way…and now the company is at over $100mm ARR
Also a great 🧵 here: Constraints are good and can help you build the right DNA for your business. So before taking way too much cash and dilution than you need on day one, think again as there are lots of benefits of not taking too much too soon. The other point here is that the venture capital market is getting more and more efficient and data driven. Companies from Atlanta and Utah are no longer secrets and if you have a company with a SaaS app or an OSS company growing on Github, you will be found! As always, 🙏🏼 for reading and please share with your friends and colleagues. state of chaos invision!! from ellen Microsoft Scaling Startups
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