Ask HN: Do bootstrapped billion-dollar companies exist?
It seems like all companies that are valued at $1BN or more raised money in their early days.
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CATEGORY Bootstrapping & MRR →
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TOTAL DISCUSSIONS 134 comments
Lots of non-technology companies.
Out of tech companies -- Craigslist, Atlassian, 37Signals, possibly MailChimp.
Fringe examples -- Indeed sold for $1B and only took a small amount of later-stage funding [1] from USV. WhatsApp took $8M from Sequoia but apparently didn't spend any of it [2].
[1] http://avc.com/2012/09/indeed/
[2] http://forbesindia.com/article/the-worlds-billionaires/the-$19-billion-poker-game-inside-the-facebookwhatsapp-megadeal/37461/0
I think part of the problem is in how you value companies. Basically, you can only "value" a company when someone makes an investment. So if a (sophisticated?) person or VC invests in it, or if it goes public, we would consider that an estimate of value.
If no one invests in it, and you are clipping coupons, how would you know you have a billion dollar company? You could have $100 million a year in earnings and some growth, and have a pretty good idea, but you don't know. Conceivably, whatsapp could have bootstrapped their way to $1 Billion before they accepted VC money, but even they may not know.
It was started in 1837, so I am not sure you will care, but I strongly suspect John Deere was bootstrapped. They are worth more than $7 billion.
http://www.deere.com/wps/dcom/en_US/corporate/our_company/about_us/history/timeline/timeline.page?
http://www.deere.com/wps/dcom/en_US/corporate/our_company/investor_relations/why_invest/why_invest.page
Another non-technology company, longtime in the making is Arthrex - http://www.businessobserverfl.com/print/ENTREPRENEUR-OF-THE-YEAR-LeeCollier-REINHOLD-SCHMIEDING/
"Schmieding takes a shot at those who choose the easy route to entrepreneurial success, writing: “The era of personal sacrifice and risk taking has been replaced today with venture capital and IPOs that use other people’s money as collateral"
It would be interesting to know whether companies that are bootstrapped are statistically more likely to succeed than VC-backed companies. Do founders who risk their own capital have fundamentally different approaches to business than founders who are spending other peoples' money (VC funds)? Do they do more market research before starting their companies? Do they recruit different kinds of employees? Do the founders have more business experience? Does anyone know if any research has been done on this?