Why I turned down investor money for Bunny Inc.
“Who are your investors?” “How much have you raised?” I’m asked these questions constantly about my businesses, Bunny Inc., from other entrepreneurs, media, and most tech people I’ve met. The answers are: no one and $0. Eyebrows, and perhaps red flags, rise. I have actually pitched to VCs and had a few offers. But for now, we’ve decided not to raise capital. Yes, there is a sense of pride that comes with being an immigrant entrepreneur and being able to say I’ve come this far on my own (with the support of an amazing team, of course), but it’s not just pride or the mythical “American Dream” that keeps me bootstrapping. I’ve got five solid reasons why bootstrapping is not only possible, but is a logical decision. WE ARE CASH POSITIVE. My wife and I founded the first online voice over casting website, Voice123.com in 2003. Voice123 became the first service of what’s today Bunny Inc. Thanks to a combination of great timing, good luck, and our skills and willingness to do whatever it took to make our dreams of owning a business come true, the site was actually making a profit in only six months. For now, our steady stream of income allows us execute our plans without sacrificing speed or quality of our products. I understand that many don’t have this luxury. For example, if you or your co-founders can’t code, hiring developers is going to eat a significant amount of your money (even if you’re not a tech startup, you’re going to need web development). It’s not impossible. Companies like Valve and GitHub were able to succeed by bootstrapping. If you are in a very competitive space, you may think you need VC in order to beat others to the punch, and that may very well be the case, but remember, lots of money doesn’t always mean faster product development. Money can actually have the opposite effect, affording a feeling of safety that numbs the sense of urgency that comes with having your livelihood on the line each day. With Voice123, we knew we were first in the space and that time was probably on our side, but we never relaxed. Without VC, we were able to build Voice123 into a profitable business that has lasted 10 years and build our new product, VoiceBunny.com (which is already bringing in revenue) with our own money. VCS PROVIDE GOOD ADVICE, BUT… A WELL-BUILT BOARD OF ADVISORS CAN PROVIDE BETTER ADVICE. Many startups use VCs as way to get expert advice and connections to major players in their target industries.