Bootstrapping vs VC Funding

BySaaS CFO Services March 7, 2019

The terms “fundraising” and “venture capital” are tightly linked. Raising money by bootstrapping is usually a secondary funding option. But is going the VC route better than bootstrapping?

Clement Vouillon of Point Nine Capital took a look at company data to compare bootstrapping vs VC funding. So what is the main difference? As you might expect, VC money helps companies scale. The biggest companies in the set were all VC-backed.

VC-backed companies had higher MRR, customer lifetime value, and number of employees. However, the bootstrapped companies put up respectable numbers, especially considering the VC-backed companies raised almost 5 times as much money.

Churn was similar for both types of companies. More money doesn’t necessarily lead to a more popular product.

Do you have to secure VC money to get big? Not necessarily. Here are 10 bootstrapped companies with $1 million ARR. Additionally, trends in recent years have made it more common for SaaS companies to bootstrap.

Valuation & Fundraising

3 Articles About Raising Capital

BySaaS CFO Services November 15, 2018January 14, 2019

Start-ups need to secure funding to survive. But what are the expectations of the people you’re asking for cash? Here’s a summary of 3 articles about raising capital.

i wonder if service revenue is included in arr

Valuation & Fundraising

Is Service Revenue Included in ARR?

BySaaS CFO Services December 28, 2018January 30, 2019

SaaS companies generally have two types of revenue: subscription revenue and professional services revenue. Find out if service revenue is included in ARR.

Valuation & Fundraising

Cap Table Basics

BySaaS CFO Services January 16, 2019January 17, 2019

Business founders will hear the term “cap table” used a lot, especially when it’s time to raise money. Often it’s another term founders have to learn on the fly. With that in mind, here’s a rundown of some cap table basics.

Valuation & Fundraising

Pre-Money vs. Post-Money Valuation

BySaaS CFO Services December 20, 2018January 14, 2019

Businesses trying to raise investment capital will eventually hear the terms “pre-money valuation” and “post-money valuation.” But what do these terms mean, and why are they important?

Valuation & Fundraising

3 Takeaways About a 409A Valuation

BySaaS CFO Services November 20, 2018January 14, 2019

How does an organization incentivize, retain, and reward key contributors? A common incentive is stock options. But what are stock options worth? The IRS cares about the answer much as you do. That’s where a 409A valuation comes in.

Book Reviews

5 Takeaways from Secrets of Sand Hill Road

BySaaS CFO Services September 10, 2019January 2, 2020

Venture Capital is a term that conjures a lot of excitement. But what is it exactly? Secrets of Sand Hill Road by Scott Kupor has answers.

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