Photo: Jayel Aheram via Flickr
Probably too much ink is spilled over VC funded companies. It’s curious… given that these companies represent such a small minority of the entrepreneurial activity in this country. Perhaps it’s because the stories of ambitious entrepreneurs pitching their dream to mysterious VC’s make for good, sexy fodder.
It’s great to celebrate startups, but the imbalance of press received by VC backed companies misguides some first-time entrepreneurs into thinking that the only path to success is through institutional funding.
But this can be very dangerous.
VC’s typically only invest in companies that have the potential to return a meaningful % of their fund. This means that either the size of the opportunity must be massive, or the VC’s ownership must be substantial (or both). Not all businesses are going to naturally fit the $100M++ profile, and it’s tough for an entrepreneur to pitch this kind of a vision when it might not be the right risk-adjusted path for the business.
It also can lead entrepreneurs to think that they have to sell large portions of equity early on in lieu of establishing a cash generating business model. Instead of scrambling to launch a free product and trying to get tons of scale early, some companies have done quite well bootstrapping for years and charging from day one (Squarespace is a great example).
So I’m pleased to see that there will be a panel at the next WebInno on “Self-Funded Success Stories” featuring some of my favourite tech entrepreneurs. It’s a great panel of folks who have built successful businesses that received no VC investment. These companies are all in typical VC sectors of online advertising, e-commerce, and SAAS, but chose to take different funding routes for various reasons. Below is a quick bio of each, but definitely come out and see them in the flesh on Sept 13.
Steve Conine – Co-Founder, CSN Stores
Steve Conine is a serial entrepreneur who co-founded CSN stores with Niraj Shah in 2002. CSN is the company behind ecommerce properties like cookware.com, strollers.com, and allmodern.com. With over 400 employees and hundreds of millions of dollars in revenue, CSN is truly one of the great self-funded success stories of recent times.
David Hauser – Co-Founder and CTO, Grasshopper
David and his co-founder Siamak founded Grasshopper in 2003 while still undergrads at Babson. They have grown their first product, a virtual phone system, to over 100,000 users. Most of their customers are entrepreneurs themselves, and David and Siamak have gone on to launch other software products designed to empower entrepreneurs launch and scale businesses more easily.
Todd Garland – Founder and CEO of BuySellAds
In 2008, Todd was a designer and SEO specialist at HubSpot (always great to learn entrepreneurship by working at successful startups). He was also a blogger and advertiser, and saw unnecessary friction in the process of buying and selling online advertising at the scale at which he was operating. He started BuySellAds on the side to scratch his own itch, but quickly shifted to full-time to keep up with the network’s rapid growth.
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