Quick Hits: To Be Funded or Not To Be Funded, SaaStr Annual 2018
Speakers
Amy Pressman — Co-Founder & President / Medallia
Teddy Schleifer — Sr Reporter / Recode
Description
One company, two sides of the funding debate. Medallia, #7 on Forbes’ 2017 top 100 private SaaS companies, bootstrapped for 10 years, then took $255M in investment from Sequoia Capital over the past 6+ years. Company co-founder Amy Pressman talks about the pros and cons of being bootstrapped vs investor-backed and provides tips for entrepreneurs about how to go it alone (even in Silicon Valley!).
Takeaways
Bootstrapping
“Was it [bootstrapping] ever challenging?” — Teddy
Nah, piece of cake 😉
“I don’t know what kind of help Sequoia would have given us in the early stages” — Amy
Advantages
- Control over how they spent their time and resources
- Clarity on focus because your survival depends on it
- Business Problems, not Board Problems: Amy mentioned how, when she was bootstrapped, she was the only Bootstrapper in a Co-founder group. While she was talking about problems in her business, everyone else was talking about Board Dynamics and problems with their investors
Being funded
Advantages
- Name recognition and credibility
- Without the capital resources of being funded, you have [or get?] to be more creative. With funding, you can operate in more traditional swim lanes (which is not necessarily a good thing)
Tying Ambition to Funding is Demeaning imo
“By not accepting venture capital, you’re building a less ambitious company” — Teddy on what some VC’s would say about not taking VC money
In the words of E-40 “Nope.” Capital raised does not equal Founder ambition. Ambition is not one-sized fits all.
Considering Giving up Equity
You really want to think about what you want to do with your company. How large do you want to grow? How quickly do you feel you need to do it? What market are you in and how competitive is it? And many more considerations…