This year more tech founders have chosen to bootstrap as a foundational strategy before seeking external VC funding.

You can see this trend across the broader tech start-up landscape and in the SaaS market in particular.

There are several factors at play here:

1️⃣ Economic uncertainty, Fintech winter, and changes in the investment climate

2️⃣ AI, automation, low code and generally better tooling making it easier and faster to build products.

Both are shifting the landscape

Founders can, and in some cases, have no choice but to get on and do more with less.

3️⃣ But there is also a broader disillusionment with the traditional venture capital model

Startup founders have become more savvy and are learning from both their own previous and other founders experiences

A lot of knowledge and insight is being shared

Founders are now increasingly more aware and forewarned of the strings attached to VC funding

Everyone now gets the VC trade off, you get lots of money, but instant pressure to spend it on growth - often despite not having product-market fit and not being ready to scale, which leads to more distracting funding rounds, the inevitable equity dilution, and a loss of control. And that all happens in a flash!

4️⃣ Also many are exploring attractive alternative funding options, angel investors, private debt, crowdfunding and revenue-based financing, there is a diversity of ways to support growth without equity dilution.

So with bootstrapping becoming a foundational phase, are the days of massive external funding at the start of a start-ups lifecycle behind us ?

The exit window in and around $/€/£50m offers far greater optionality.

Exits above $100m become increasingly rare and unicorns must aim to go public.

This is the territory that most VCs are playing in.

But start-up survival rates are so low as it is.

In most cases trying to get big enough fast enough to make a massive $100m exit just 10x the likelihood of failure.

Many two time founders know this from experience and are opting to bootstrap, take their time, be prudent and plan for a decent exit that, because they are not excessively diluted, will still generate life changing amounts of money.

Some say bootstrapping to $10m ARR is the new unicorn. I tend to agree!

I have immense respect for anyone who dares to tackle a bootstrap venture,

And especially in the fintech industry where large amounts of capital through external finance is often assumed to be essential.

They are no doubt a smaller group than in SaaS or elsewhere

But their numbers will grow.

Shout out if you are one of them!