Name some successful tech startups that have taken zero outside investment.

Club Penguin. It was a Web 2.0/virtual community play. Acquired by Disney for $350+ mil. I don't know if Plentyoffish qualifies as a Web 2.0 startup, but it is making a lot of cash. I could name a few more. Cheers.

PS. I agree with the original poster "The first mistake startups make is they need VC or angel funding to get moving," if by "get moving" s/he means get started. You might need it when you want to expand, grow, get serious, etc. but you don't necessarily need it at the beginning.

Hot or Not. Made the owners enough free flowing cash, in the millions every year, that they certainly weren't even looking for an exit.

Sure, there are a handful. But the fact that those few are famous on account of having taken no investment is evidence of just how rare it is.

Among successful startups, the ratio of those that took outside money to those that didn't is 100 to 1, maybe 1000 to 1. Where the threshold for success is going public, it's effectively infinite.

Someone at BarCampBlock yesterday suggested that in the past >15 years, vc-backed startups of all types accounted for 23% of successful exits, while focusing on tech-specific startups raises that number to 46%. It sounds possible, but a source wasn't provided - it'd be interesting to determine how successful these 'successful exits' were, and if the size ($) of the exit is correlated to the presence of VC. I imagine it would be.

I started 9 companies with no outside cash. The first one i started I sold and then joined the parent company which had not taken in any outside cash. We grew that to $600m in revenues within 5 years.

All that said, I would still say that if you were a BETTING man, your bets would likely go on funded companies.

Winamp. $0 outside investment, was making $1M/y off of advertising at time of acquisition, $100M exit.

You can include most software companies that started as shareware vendors: id Software, Apogee, etc.

37 signals was running successfully for 7 years before taking an investment.

http://www.37signals.com/svn/archives2/bezos_expeditions_inv...

Money tends to find success. Not the other way around. Money is put into companies that are already on there way to be "successful" (assuming they are not already). The money just expedites the growth.

I think Microsoft only took investment before it went public. It was already a very successful company by then.

Fairmount Automation, est. 1996 http://www.fairmountautomation.com/

del.icio.us. $0 outside investment, $15-$30M acquisition. (rumored)

whoops

Kenan Systems. See elsewhere in this thread.