Yes, but spending money on growth is probably the number one thing VCs like to invest in. If you happen to be profitable, but also can demonstrate a clear path to growth, then VCs will lean in.
Example:
- buy 1 million shares at $1.
- sell 1 million shares for $101.
- (101 - 1) * 1_000_000 = 100_000_000
- 100_000_000 * 0.2 = VC gain of 20_000_000
Sure, but if the business is profitable that means it works. Now the investment can be spent on bending the curve up (e.g. hire more salespeople that could have been afforded from the company’s revenue alone) rather than the more risky approach of spending the money to see if the product will make it at all.
> A profitable business has either reached market potential, or isn't spending enough on growth.
This is a naïve view from the SaaS era propagated by SaaS and consumer app investors. Does not apply to most businesses and applied to none of the biggest companies today like Microsoft, Apple, NVIDIA, Google, et al.
Look at google: no, it wasn’t profitable (no revenue or even revenue model) but had huge uptake by the nerds without any effort to market it.
> Anecdotally I can think of many more examples of unprofitable businesses getting VC money.
Sure, several of my own companies were funded in this mode. But that capital was more expensive because it was used figuring out if the tech would work and if there were actually customers for the product.
Sure. But from experience it takes 3x as long.
After a long day of coding it’s not fun to come home and do another 8 hours.
Bootstrapping is in my opinion much harder than VC backed.
When you finally take 1 day a month off and look down from 10,000 feet up
The reality of how things are going is gloomy
It might also help if you can mentally spin things to be more boomy. Optimists in the house
Customers today expect polish and few bugs right out of the gate. I spent months on polish alone. If you don't, your product is going to be savaged like this:
"Former Yahoo CEO Marissa Mayer’s New Photo-Sharing App Has a Design From the Stone Age"
https://gizmodo.com/marissa-mayer-new-app-shine-photo-sharin...
Now: I know this app existed.
Having no polish can't be worse than having no app.
The benefit of being bootstrapped, of course, is that it's designed with costs in mind, so I don't spend more on hosting than I do on my Netflix subscription.
That article follows a long standing tradition of women attacking other women in power based on appearance to try to elevate themselves. No insight on polishing trends can be learned here.
I'll take that as a compliment.. as someone that took nights to build a SaaS product solo into a multi-million dollar business (and still do it solo).
I find the mindset “my pitch deck was 2 months old so I didn’t get funding” very out of touch of business realities. It is far more likely that that type of business doesn’t need VC funding. Your SaaS can probably be built with your daytime developer salary. No VC ever says “wow, what a great investment opportunity, one of the best, but the slides were old”. You don’t even need the slides, or the rehearsed elevator pitch. Just build a business that’s worth VC money (solid, profitable, and ready to scale up) if you absolutely insist on it.