I've been listening to Rob Walling on "Startups for the rest of us" for a long time, he's pivoted his position from bootstrap-only to funded bootstrap. It'll be interesting in the coming years to see what successful companies come through this route.
Yep, I read it shortly after I made the comment. Thank you.
F&F won't work for me. I don't have friends of family that does have capital to invest in a risky company.
And even if I did, as you said "just don’t do it.".
I agree, it's not the best way.
> go find legitimate angel investors who resonate your message or journey.
Totally agreed.
My question is, what's the most efficient way to go about it?
The cold outreach approach so far has worked HORRIBLY for me, regarding user interviews and product validation phase.
I sent like ~1000 messages via linkedin to people that should be VERY interested in the problem I'm solving and it's next to impossible to get anyone to talk to me even for 10 mins. ( even though I have validated the concept in a different way so I moved on )
My point is, cold outreach seems very inefficient to me.
So much effort to write (and personalise) messages, only for <0.1% to reply.
Automate it? I don't know.
Just asking if you saw things that work vs things that don't in practice. To extrapolate what might be more efficient.
( I know it's not a solid way to do it, but it's better than throwing darts blindfolded )
And again, thank you for sharing all that experience! Much appreciated.
I’m a former failed unicorn founder of 10 years with a bloated pref stack and nothing to show for it.
I’m starting my next business and curious about this approach but I worry that it could be harder than the other options . For many startups , raising a proper VC round can take six months . Now, how much longer will it take if you’re pitching a 2-3 X return? I don’t see a mature investor ecosystem for those types of businesses like I see for unicorn-style businesses. Would it take 9 months to raise a 1M seed? At that point is it best to just focus on business fundamentals and get to profitability?
Alternatively you could lie to the early investors and tell them you’re pursuing a unicorn but then course correct away from that plan after your early round or two. But that feels yucky to me.
The only option might be what the author described: stumble your way into it by accident.
I’m not trying to be critical. I just don’t see how you could pursue this path.
You're right - there isn't a mature investor ecosystem for this pathway, certainly not VCs. That said, I do think there are angels out there who’d be open to this approach.
You might take a lower valuation upfront to strengthen the ROI story, and sure, the raise may take a bit longer — but agree, it’s a healthier route than raising under false pretences or selling a story you don’t believe in.
I've been talking about this idea of starting companies in-between bootstrapping and VC for ~10 years. It's why I started TinySeed (now invested in 204 SaaS companies using this "in-between" model).
And discuss it in my books and podcast (Startups for the Rest of Us).
I even have something I call the 1/9/90 rule, where I believe ~1% of startups should raise venture, 90% should bootstrap, and 9% should raise alternative/indie/in-between funding from folks who don't expect them to raise venture in the future.
It's a great path, one that many more founders should be taking.
I've been listening to Rob Walling on "Startups for the rest of us" for a long time, he's pivoted his position from bootstrap-only to funded bootstrap. It'll be interesting in the coming years to see what successful companies come through this route.
Very good write up! As a bootstrapper this definitely gave me some food for thought.
Thank you for the post.
What do you think are the key attributes of a successful angel "round" for that middle path?
I'm bootstrapping myself, and I had a very similar thinking of how to sustain it, but most thinking out there is on how to pitch big to VCs.
Curious on what a good "recipe" is in your opinion, on pitching to angel investors for that middle ground. (and maybe how to select ideal investors?)
Thank you.
It may not be exactly what you're looking for, but recently wrote about raising a friends-and-family round here:
https://mattgiustwilliamson.substack.com/p/zero-to-funded-raising-your-f-and
A few folks have asked this, so will try answer the question directly in a separate post.
Yep, I read it shortly after I made the comment. Thank you.
F&F won't work for me. I don't have friends of family that does have capital to invest in a risky company.
And even if I did, as you said "just don’t do it.".
I agree, it's not the best way.
> go find legitimate angel investors who resonate your message or journey.
Totally agreed.
My question is, what's the most efficient way to go about it?
The cold outreach approach so far has worked HORRIBLY for me, regarding user interviews and product validation phase.
I sent like ~1000 messages via linkedin to people that should be VERY interested in the problem I'm solving and it's next to impossible to get anyone to talk to me even for 10 mins. ( even though I have validated the concept in a different way so I moved on )
My point is, cold outreach seems very inefficient to me.
So much effort to write (and personalise) messages, only for <0.1% to reply.
Automate it? I don't know.
Just asking if you saw things that work vs things that don't in practice. To extrapolate what might be more efficient.
( I know it's not a solid way to do it, but it's better than throwing darts blindfolded )
And again, thank you for sharing all that experience! Much appreciated.
Great post!
I’m a former failed unicorn founder of 10 years with a bloated pref stack and nothing to show for it.
I’m starting my next business and curious about this approach but I worry that it could be harder than the other options . For many startups , raising a proper VC round can take six months . Now, how much longer will it take if you’re pitching a 2-3 X return? I don’t see a mature investor ecosystem for those types of businesses like I see for unicorn-style businesses. Would it take 9 months to raise a 1M seed? At that point is it best to just focus on business fundamentals and get to profitability?
Alternatively you could lie to the early investors and tell them you’re pursuing a unicorn but then course correct away from that plan after your early round or two. But that feels yucky to me.
The only option might be what the author described: stumble your way into it by accident.
I’m not trying to be critical. I just don’t see how you could pursue this path.
Appreciate the engagement Scott.
You're right - there isn't a mature investor ecosystem for this pathway, certainly not VCs. That said, I do think there are angels out there who’d be open to this approach.
You might take a lower valuation upfront to strengthen the ROI story, and sure, the raise may take a bit longer — but agree, it’s a healthier route than raising under false pretences or selling a story you don’t believe in.
Loving it, Matt! 🔥
Would love to see a comprehensive post on funding methods for the middle way!
I can certainly give that a go
Please do -- this really struck a chord with us.
Love the Hinge date ref 😂
Glad someone found humour there 😂
Great summary and as you say shadowy world that is relatively unknown. Get drinking more caffeine and keep writing 💪.
On it ☕️
Great post!
Very informative stuff Matt 👌
Great insights Matt!! It would be nice to connect
Thanks Mohit - happy to!
I've been talking about this idea of starting companies in-between bootstrapping and VC for ~10 years. It's why I started TinySeed (now invested in 204 SaaS companies using this "in-between" model).
And discuss it in my books and podcast (Startups for the Rest of Us).
I even have something I call the 1/9/90 rule, where I believe ~1% of startups should raise venture, 90% should bootstrap, and 9% should raise alternative/indie/in-between funding from folks who don't expect them to raise venture in the future.
It's a great path, one that many more founders should be taking.