21 SaaS Founders Talk About Funding: VCs? Angels? Bootstrapping?
We asked 21 SaaS entrepreneurs about their Saas funding path. Their answers are below.
Written by Simon Alcott: Published Sept 13th, 2019 | Updated Sept 13th, 2019.
Simon Alcott is a growth hacker and the driving force behind WhalePages, a SaaS Marketing Agency. Today he asks SaaS founders about their funding path.
9 Minute Read
We Asked 21 SaaS Companies How They Finance Their Operations.
Over the next couple of days WhalePages will have some very special posts being published on our SaaS marketing blog. We’ve interviewed dozens of SaaS companies and asked them intimate questions about the inner workings of their SaaS companies. For example, yesterday we asked SaaS founders how long it took them to reach $2000 in MRR. We’ve also written a post about how MRR translates into SaaS valuation (in case you’re thinking about selling your SaaS).
Today, we round up the SaaS teams again, and ask them the next question in our roundup series. Today we ask the founders:
“Are You Self Financed Or Do You Have Investors Onboard? What Are The Pros & Cons Of Your Decision?”
1. Claude Schneider, Founder of SmarterQueue | Social Media Automation Platform
I’m in a fortunate position to be technical, so I built everything myself. This meant I was able to get a functional product into people’s hands that they were willing to pay for. I also had some savings to help hire the first contractors, so I’d say SmarterQueue was 20% seeded from my own investment, but then 80% bootstrapped from customer revenue. While I know that not everyone can start making revenue without taking investment, I feel that early stage entrepreneurs should definitely put more effort into getting paying customers, rather than trying to convince investors for funds. Pitching for investment is a full-time job (i.e. a distraction from what your business is trying to do), and in no way helps you reach product-market fit. If anything, it delays your learnings, as you’re not finding out whether customers will pay for your idea. The best money to try to win is always going to be revenue, not investment.
2. Karsten Madsen, CEO of morningscore | SEO Platform
We have an investor. We didn’t really run for a long time before we got an investor on board. This is my 2nd company so it’s less of a bootstrapped endeavour. It gives us more stability in a way to actually pay people a decent wage but it also is tough financially to run a startup like that and to find investors for that kind of journey. Finding an investor is super hard. It’s easy to get them interested but there are many investors out there that might hurt your business because they see the world differently. Chemistry between founder and investor is important. And we found our perfect match in an investor that has a crazy good reputation in Odense (our town). Morale and ethics are super important to me, so I consider myself very lucky to him as an investor. I met A LOT of sketchy business angels already.
3. Sonya Siderova, Founder of Nave | Efficiency Analytics Platform
Nave is a self-funded company. Financing the company on my own is one of my strongest motivators to grow the business as fast as possible. It keeps my mind sharp and it always reminds me how important this initiative is from both a professional and personal perspective. There is a lot of pressure and responsibility that comes with it, though.
4. Tobias Knobl, CEO of Mailbutler | Email Platform
We are entirely self-funded and profitable. This allows us to fully focus on our product and our customers without having to satisfy investors at the same time. Since no approval process is required, we have freedom of choice and don’t depend on a multitude of shareholders. The downside of self-funding is having limited resources to grow our start-up. However, taking full responsibility for funding our business has worked out pretty well for us.
5. Mike Myer, CEO of Quiq | Business Messaging Platform
We are funded by VCs and recently took our Series B round. The VCs we work with bring unique perspectives based on great experience that help push us and make sure we continue on the right path. We partner with our VCs and don’t just interact at quarterly board meetings. We engage regularly and enlist their help as we face different challenges.
6. Emad From CyberStockroom | Inventory Management Platform
We are entirely bootstrapped/self-funded. It’s a humbling experience because you can only grow as fast as your revenue will allow. There’s none of the illusions that come with valuating a company based on projections. It’s a very raw experience and it’s very fulfilling. There is a sense of complete control over the trajectory of the company. Those are the positives. There are many negatives of course. Resources are severely limited and it can be extremely stressful.
7. Simon Chatfield, Founder and CEO of OptimumHQ | Business Solutions Platform
8. Faik From dbBee | Spreadsheet Publishing Platform
We are self funded, mostly because of difficulties in finding adequate partner.
9. Michael Payne From Intervals | Time Tracking & Task Management
We are proudly bootstrapped and have no outside investment. The main pro is you get to go your own path. The main con is by going your own path you have to figure out everything on your own and your resources are more limited.
10. Team at Publit.io | Media Asset Management Platform
We initially self-funded company for about 8 months, then we raised small initial Investment to release prototype and then we got a government grant. A few months ago we managed to raise capital from strategic partner for the next 2 years.
11. Kaushal Sutaria From MyEasyISO | Compliance Platform
We are self funded and funding is brought in by the founders. We are exploring the venture capital funding options for our growth phase now.
12. Casey Sullivan, Founder of Bookafy | Appointment Booking Platform
We are self funded. The benefit is focus… we don’t spend time pitching investors. One general benefit is that we don’t have to “answer to investors”, but honestly, that wasn’t a factor for us. Our main reason to bootstrap was that we didn’t want to spend 3-6 months pitching when we could spend that same time focusing on the business.
13. Kyle Racki, CoFounder From Proposify | Sales Platform
Proposify was primarily bootstrapped for years, and took a first round of significant investment in 2018.
14. Piotr Łapiński, Marketing Manager From Konfeo | Event Registration Platform
We’re self funded. Pros: independence, cons: lack of substantial marketing budget.
15. Amrish From Pixpa | Portfolio Platform
We are self-funded. While bootstrapping has led to slower growth, it has also made us focus on generating revenues and taking product decisions for long term success.
16. Richard From HelpSite | Support Center Platform
100% self-funded. Since we are a profitable, sustainable business, our customers don’t need to worry about us running out of money or us needing to find a quick acquisition to a company that ultimately wants to shut down the product. Instead, our goals are aligned: slow & steady growth in the business leads to stability and continued product improvements.
17. Team From Fanout | Streaming API Platform
The company’s funding is what we would call angel-bootstrapped, where our financial resources come primarily from our founder and a handful of angel investors. We participated in the Seed Sumo accelerator in 2014, which was instrumental for connecting us to angels.
What’s great about our approach, compared to, say, raising VC money, is we’re able to run a stable business on our own terms. We don’t move as fast as other companies with lots of capital, but we’re fine with that.
18. Peter Coppinger, CEO and co-founder of Teamwork | Collaboration Platform
We’re currently 100% self funded and have been since day 1. There’s pros and cons to everything. A pro means we got to bring the business to this point while being in full control of how and when we do things. A con is that we don’t get to move as quickly as we’d like or don’t have the same level of advisors as another company with funding might have. We’re currently exploring funding options.
19. Jacob McCarthy From Freedom Edits | Photography Editing Platform
We are a bootstrapped business who have previously turned down outside backing. Bootstrapping has been great for us, it’s allowed us to maintain total control of decision making. The downside has been spotting opportunities we’ve had to delay execution on due to the absence of liquid capital.
20. Henry Joyce From Align | Growth Management Platform
We raised a Series-A in early 2018.
21. Team From RationalPlan | Project Management Platform
Self funded. Pros: we have the control on the development. Cons: there is a slower business growth..
We hope you’ve found this list helpful. If you’d like to learn more about growing your SaaS company we suggest you head over to our SaaS marketing homepage. Or check out SaaS growth TV where you learn about the strategies we use to scale SaaS companies.
Written by Simon Alcott: Published Sept 13th, 2019 | Updated Sept 13th, 2019.
Simon Alcott is a growth hacker and the driving force behind WhalePages, a company that grows SaaS websites. So, if you have a SaaS company and you’re kinda into things like website traffic and increasing your MRR, then check out our SaaS marketing agency today.
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