Why we decided to raise money after months of IndieHacking
In the beginning, all we wanted was to eat ramen on our own dime. Now, we’ve raised $1.7 million from Silicon Valley VCs. In this post, I’ll tell the story of why we decided to raise money from investors for our online video editing startup, Kapwing
Background
There’s humble glory in bootstrapping a business because you can take full credit for every dollar in revenue. Eric and I celebrate every uptick in daily video count, every Stripe notification, every new link from bloggers and journalists. Since launching our website in October, we’ve bootstrapped customer support, outreach, content marketing, design, development, and everything else ourselves. For Kapwing, I learned Python, interviewed on IndieHacker, and incorporated a business for the first time. Kapwing grows despite skepticism from our friends and from investors. We make what we want to and don’t answer to anyone. We’re proud of our frugal small business that adds value with no marketing or operating expenses.
Read the full post where I refute some of the myths of bootstrapping and talk about the reasons we decided to raise. On the Kapwing Blog
Hey Julia - this was a great article. It sounds like you are raising money for ALL the right reasons. And since you are coming from an Indie Hacker / boostrapper background, you won't get caught up with the frivolous spending I've seen other startups do (I previously worked as a PM for a fast growing "unicorn" in NYC).
I'll be excited to follow along in your journey. Onwards and upwards =)
Cool & good job! but how exactly do you monetize a GIF making service further down the line? Do you have some secret sauce/upcoming project that you've been working on?
Hi - Kapwing is a video editing service, so we don’t have a gif maker. We monetize from a premium plan that our power users subscribe to for $20/month. Now that we have funding, we’re also dreaming about the next product offering, but still in the planning stages
Super! Congrats guys!
Thanks Mustata!
someone fix that first link.
Reading about your chalk experiment, I'm not surprised they washed it off quickly. Broken window theory you know.
One thing I'm planning is to insert an ad with a QR code into the triangle of my bike. The bike usually parks in the public at high frequency place anyways, one of them actually a pokemon go hotspot, and if I manage to make it big enough I'm sure people do scan/open just anything.
Plus, I can track the campaign.
That’s an interesting idea - you should write a blog post about trying to put your QR codes all over SF. I never scan QR codes in my day to day, but it might work for other demographics.
Fixed the link! Thanks for the catch
Hi Julia,
Congratulations. I assume being bootstrapped helped you negotiate a better deal?
I.e VCs had to court you, rather than vice-versa because you don't need their money?
It was definitley us courting the VCs mostly. For better or worse, there’s a brand perception at play. We had inbound investor leads from B- or C-firms, but if we wanted to get in with the top-tier A-firms we had to set up meetings and pitch them. And most of them said no. There are very very few companies that are being courted by the best firms at the seed stage.
We struggled with this issue - is it worth going after the sexiest brand-name firms? Or, if all investors are basically the same, is it not worth it? Not sure what the right answer is...
VCs were impressed with our traction, having not raised any money yet. They said it was rare for someone to build a product themselves and grow it as quickly as we did with no expenses. But it was not all they cared about - you also need a big vision, a good team, and a compelling product story
Thanks so much for writing this! I really appreciate your honesty and realness in the article. And congrats on getting funded! Having followed your progress as a startup for a few months, I'm really excited to see where you go with it!
Of course, thanks for reading and following Noah!
I'm far from posting a lot on social media and I don't even have an Instagram account, but I looked on your marketing landing page and I can say that I will try your product. Any plans on launching mobile apps? Congratulations on all your achievements!