Starting a business is hard—bootstrapping it is even harder. It may sound funny coming from a professional investor, but I have a deep admiration for entrepreneurs who build great businesses without outside capital. They don’t need my money, but they have my respect.
I have partnered with a handful of bootstrapped entrepreneurs and have befriended many more. The popular (mis)perception is that bootstrapped companies are just small start-ups or lifestyle businesses. This is completely wrong: many of these companies are category-winning and have reached massive scale. Some of them have even made hundreds of millions (or billions) in revenue, all without any outside financing. These are lifestyle businesses if your lifestyle is having a copious amount of yachts.
Getting to this level purely via bootstrapping is hard. However, this toughness is what makes these companies great—they are shaped and hardened by the crucible of customer demand. With limited outside capital, they must finance themselves the old-fashioned way: selling products to customers. Growing means serving a need that is acutely felt by customers yet overlooked by other vendors.
They are built by entrepreneurs who are keen to go it alone. And that freedom from outside investors also gives them a chance to avoid conventional wisdom. This manifests itself in the product but can even mean reinventing the value proposition, business model, and organizational structure. It doesn’t always work, but when it does, there are sometimes strange and powerful results. Plus, bootstrapping allows founders to be more themselves versus contorting their personality into what shape investors expect.
Building a business without the benefit of outside capital can be a lonely, long road. However, it doesn’t have to be. So much of the narrative of tech is in the raising of huge gobs of funding. It feels like raising capital is almost forced down your throat by the media. By our estimation, the bootstrapped path is undercovered (and underestimated). We want to change that. These companies and their founders’ stories deserve to be told. Their war stories, their unconventional views, and the moves that propelled them to greatness.
We’ll interview founders that have bootstrapped to greatness, both founders that we’ve been fortunate to invest in, as well as founders who have just become friends along the way.
Why are we doing this? Because we love working with bootstrapped companies! Scaling without outside funding means you are doing something different and doing something right. We love working with founders who don't need our money but want our help. We believe that we can help these Bootstrapped Legends reach new heights with the experience and resources of the Tidemark community.
Without further adieu, you can listen to our first interview with Lawrence Hester, Tidemark Fellow and co-founder of FareHarbor about his journey as a Bootstrapped Legend here.
If you’re interested in staying in the loop when new episodes of Bootstrapped Legends launch, you can subscribe here. If you're a Bootstrapped Legend who wants to tell your story or learn more about working with us, please reach out to us at knowledge@tidemarkcap.com.
Appendix:
Our bootstrapped creds include:*
- Kajabi is an all-in-one platform that empowers teachers, coaches, and knowledge entrepreneurs to build businesses online. Kenny Reuter bootstrapped to over $100m in ARR and helped its customers generate over $5B in GMV. Tidemark invested in 2021.
- Karbon provides practice management software for accountants. It was bootstrapped by Stuart McLeod, John Freeman, and Ian Vacin. Tidemark invested in 2021.
- Merkle is a leader in customer data management and bootstrapped for 25 years to $250M in revenues before we invested at a prior firm. We helped them scale into digital marketing before selling for billions to Dentsu. Within Dentsu, they're now generating over $2.5B in sales.
- Sitecore bootstrapped the leading CMS software company out of Copenhagen. They were already at ~$50m revenue scale when we became their first investor at our prior firm. We helped them 4x their revenue and become the global category leader before selling for billions to EQT.
- Siteminder is a leading vertical SaaS solution for hotels. When we had invested at our prior firm, it had reached over $10M in ARR on less than $2M in burn. After investing, we helped the company scale to over $100M ARR and go IPO.
- SMT was a provider of oil and gas discovery software. Their product was so popular that it became an industry term and scaled to ~ $25M in sales WITHOUT A SALESFORCE! When we invested at our prior firm, we helped them expand their management team, build a global salesforce and successfully exit to IHS.
*Includes prior investments at other firms. Other investment professionals not employed by Tidemark were involved in the identification, evaluation, negotiation, investment, execution, and operations and any sale processes with respect to such companies.
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