"Indie" doesn't mean "bootstrapped" anymore

When I started Indie Hackers back in 2016, I chose the term "indie" to represent our independence from jobs and 9-to-5 schedules, from bosses, from capped salaries, from offices in fixed locations, and from investors who try to dictate how we run our companies.

But today I might have to cross investors off that list. It's becoming increasingly common to have investors and yet, somehow, remain indie.

The Puzzle

To an alien visiting Earth for the first time, it might seem puzzling that any founders would dislike the notion of having investors. Don't both parties have a mutually beneficial relationship? Ideally, yes. But historically, not necessarily.

For decades now, funding for Internet companies has primarily come through venture capital, and venture capitalists have a very particular model: invest a ton of money into startups, then push them to grow as rapidly as possible. The result, predictably, is that a few startups win big, but most go down in flames. Rob Walling put it perfectly in our recent conversation:

Let's say you put $10, $20, $30 million into a company, and you say alright, become a billion-dollar company. Instantly, your risk shoots through the roof that you're gonna fail. Because you're gonna hire 50-100 people, there's way more chaos, you're moving way faster, and it just makes it more likely that you're going to fail… It really increases your likelihood of either failing, or being a unicorn, a billion-dollar company. They want it to be binary.

If you're okay with that kind of polarized outcome, VC is for you. But for the majority of aspiring founders, raising venture money requires doing the unnatural and unpleasant — contorting your business and your lifestyle into something far riskier and more stressful than it really needs to be.

It also means giving up the very independence you sought as a founder in the first place. VCs are gatekeepers who can tell you "no," like a boss denying you a promotion or a raise. And even if VCs decide to invest, they typically put in enough money to demand board seats. Either way, you now have a boss.

So that's the first piece of the puzzle: venture capital = a loss of freedom and independence.

Naturally, founders who didn't like the VC option turned to other forms of funding, but for years they only found more of the same. Accelerators like Y Combinator describe themselves as "the earliest stage of venture funding." And individual angel investors often follow the same playbook. For example, here's Nivi's advice for angels on the influential Venture Hacks blog:

Focus your attention only on companies with the potential for a 100-1000x return. Otherwise, pass. Without these large exits, your portfolio will not achieve a venture return.

Since venture capital was the only game in town, funding became synonymous with venture capital. And that's the second piece of the puzzle: all funding = VC.

Putting the pieces together, if VC means giving up your independence, and if all available forms of funding are really just venture capital in disguise, it follows that all fundraising requires giving up your independence.

It's no surprise then that bootstrapped founders have been banding together since the end of the dot-com boom, literally defining themselves by their opposition to funding. The very tool that should help these founders accomplish their goals has instead, for decades, excluded them.

A Million Dollars

In 2010, these frustrated bootstrappers were my heroes. I looked up to people like Jason Fried of Basecamp and Peldi Guilizzoni of Balsamiq, who'd somehow found a way to make millions of dollars building SaaS apps without raising any funding. That's hard to do today, but it was even harder back then.

There was no Indie Hackers, no MicroConf, no playbook full of transparent founder stories. Stripe wasn't available yet, and it could take months just to be able to charge credit cards. Developer tools and resources like AWS were rarer, harder to use, less powerful, and more expensive. And the Internet was a smaller place, with fewer customers online willing to pay for software.

Even the culture itself was against you. It sounds bizarre, but at the tail-end of the last recession in 2010, making money was considered… stupid. The name of the game was to raise funding, give away your product for free, achieve hypergrowth, and figure out your business model later. Sean Parker's character in The Social Network captured the zeitgeist perfectly in just a few words:

A million dollars isn't cool. You know what's a cool? A billion dollars.

Coincidentally, I applied to Y Combinator the same month that movie came out. Despite the fact that my heroes were bootstrappers, their path seemed so much harder to follow.

It's remarkable just how much has changed.

All of the aforementioned challenges reversed course in the intervening years, making it much cheaper, faster, and easier to get started. How many businesses wouldn't exist if not for Stripe? If not for AWS and its competitors? And if not for the countless founders who've been generous enough to share their stories and strategies over the years?

We've also seen an explosion in the number of people who've learned to code, which is the gateway drug to starting an Internet business — over 85% of indie hackers get their start as software engineers. When you factor in the argument that we're in the midst of code disappearing as a gatekeeper, the number of potential founders should only continue to skyrocket.

The result is that we now live in a world with at least tens of thousands of indie hackers building profitable online businesses. And I'd wager the vast majority of them happen to think that a million dollars is pretty cool.

Bootstrappers, Meet Funding

This isn't exactly a situation investors can ignore.

Just like founders, investors look for under-served but fast-growing niches where they can profit more easily by avoiding the competition. And indie hackers have proven that they can build high-margin, high-revenue businesses in vast quantities. If venture capitalists won't invest in indie hackers, others will:

  • Clearbanc was founded by Canadian entrepreneur Michele Romanow. They provide between $10K and $10M to to e-commerce and consumer SaaS companies for a flat fee, repaid out of future revenues. The minimum requirements to apply? An incorporated business, $10K in MRR, and at least 6 months of consistent revenue history.
  • TinySeed was created by MicroConf founder and indie hacker @robwalling, with the goal of finding "a model that provides capital to founders that VCs won’t typically back." They host a year-long, remote accelerator for SaaS founders, and typically invest $120-240K depending on the size of the founding team, in return for 10-12% equity.
  • RevUp Capital was founded by investor Melissa Withers. They invest $100-$300K in "B2B and B2C companies that have revenue traction, a solid growth rate, and room to run in the markets they serve." In return, they ask for a cut of your revenue, up until a certain cap.
  • Earnest Capital was created by indie hacker @tylertringas. They invest in "bootstrappers, indie hackers, makers and real businesses" via their innovative yet simple shared earnings agreement, in which founders repay them a % of earnings up to a cap.
  • Indie VC was started by @bryce to "to fund and support founders on a path to profitability." They're a VC firm that's abandoned the traditional VC model, and who instead "aim to be the last investment our founders need to take."
  • Lighter Capital was created by BJ Lackland to provide debt-based capital to tech companies averaging at least $15K MRR.

For the first time, founders who are seeking independence have a variety of funding options that conform to their goals, rather than requiring founders to conform to the venture model. Accelerators that allow you to participate remotely. Application processes that take hours, not months. Funding that's returned via revenue, not equity. Investors who don't take board seats and who won't push you to blitzscale or raise round after round.

And these examples are just the tip of the iceberg.

The big question is: Will this work? There's a reason why venture investors never took this approach before. I asked Rob of TinySeed this very question, and here's what he had to say:

The common wisdom in the VC space is you make money on your Airbnbs and your Ubers, and you lose money on most of the other ones. But the way we've modeled it out that doesn't appear to be the case… There are so many more companies that can be successful 7- and 8-figures than there are can be billion-dollar companies.

From an analyst's perspective, I wouldn't bet against an ecosystem of smart people who are competing to help other smart people make money. At least not in the long run. And the pandemic-induced recession we're facing may even be a catalyst. Startup valuations are falling, which makes VC a less attractive option. Meanwhile, many traditional high-growth startups have shifted their focus to simply surviving the next few years, and thus behaving more like indie hackers who prioritize cash flow over growth.

From an indie hacker's perspective, however, whether or not these new models succeed is irrelevant. It doesn't matter! Either way, there's finally capital available that can help you accomplish your goals without sacrificing your ideals, and that's something worth taking advantage of.

The Future: Indie ≠ Bootstrapped

At a cultural level, "bootstrapper pride" has always been something that binds us together as a community. Bootstrapping is synonymous with independence, and for most indie hackers, independence is the entire point.

But to the extent that it's possible to remain indie despite raising funds, the calculus changes, and attitudes will shift accordingly. It may be the case that new indie hackers who don't hold any preconceived biases against funding will do a better job taking advantage of the changes in the ecosystem, as more experienced indie hackers take longer to adapt.

In the long run, "bootstrapper pride" will eventually be replaced by "indie pride," which is a more direct and accurate manifestation of many founders' goals, anyway.

Rob Walling and I discussed funding for bootstrappers on a recent episode of The Indie Hackers Podcast. Give it a watch or a listen!

  1. 47

    Interesting post, although I don't know if you can call yourself "indie" anymore if you've raised money. Regardless of whether your investors want you to achieve hyper-growth or not, they are still people you are beholden to.

    In my opinion, being "indie" means being beholden to no one except your customers.

    1. 13

      Most indie hackers will feel this way in their gut, which is why I added the last section to the post. But the reality is that successful bootstrappers often end up beholden to co-founders, partners, vendors, employees, etc., in addition to customers.

      What ends up mattering the most is the nature and quality of these relationships, rather than their classification. If you have terrible customers who abuse and attack you, or you have powerful customers who single-handedly control your income, you won't feel very indie for long. Whereas if you take $50K from a new-age investor who de-risks your business so you don't blow through your savings, while you maintain complete control and grow at whatever rate is comfortable, you'll likely feel very independent.

      The vast majority of IHers are bootstrapped and always will be, certainly. But the hard line in the sand between "did raise" and "didn't raise" is destined to become less and less important.

    2. 3

      I concur. I would also assume that many potential customers will have a negative reaction towards a company that pretends to serve only the users, yet needs to serve outside financial interests too.

      For example, the previously indie game developer "Moon Studios" received a lot of heat in gaming circles for "selling out" when they let themselves be purchased by Microsoft Game Studios.

      Also 5k MRR fully bootstrapped means you can live off it and take risks by building new stuff in your free time. 5k MRR "indie in debt" means you need to grow or find additional sources of revenue.

        1. 1

          I believe that's mostly a PR move. From what I heard, they signed a preferred partner agreement giving Microsoft the right to exclude other platforms from future IP. Microsoft also owns the rights to all IP that Moon Studios had, most notably the Ori games. Plus they receive generous subsidies from Microsoft which allows them to hire people off triple-A game teams.

          So they are working on Microsoft IP following Microsoft rules and using Microsoft money. But yes, it seems they are technically an independent company.


          It says (c) Microsoft under the description of their company.

          1. 1

            Nice catch. I should've searched 'Microsoft' in their page. Learned something new today. Thanks! @fxtentacle

    3. 2

      well thats also the question. Are Basecamp guys indie? They raised some money from Bezos and then bought back the shares... It is all highly contextual. I don't think you define yourself indie based on whether you raised or not, it's rather about how sustainable your business is and whether you are aiming at an outsized exit or not.

    4. 1

      Absolutely. If I create my startup from scratch and want full control over it I can't get funded. You're funded you lose full control and more people are involved. I can't this call indie anymore.

  2. 13

    I appreciate the effort and the intention, but this is "not quite what I signed for". I have zero experience so my opinion can be questioned, but I firmly believe in bootstrapper == indie. The moment musicians sign a deal with a producer they lose their 100% freedom to pursue their own music. The moment you as a founder accept money, you are now tied to "not make them lose their money".

    You'd be turning back to make money at all costs. At first you accept "yeah, not too harmful". Then you accept more, and suddenly indie hackers turns into AngelList.

    I respect your opinion though, everyone has one!

    1. 3

      List tries to highlight non-VC funding routes. None are charities, some take equity, others could be useful as you pay it off like a loan. All require you to have bootstrapped to level where risk (to them) is low. Contrary to YC type approach where you can lose their money (and die) as they just need 1 unicorn to emerge from the glue factory.

    2. 2

      Most of the options listed in this post are debt financing, not equity financing. You're no more beholden to those funders than you would be to a bank if you took out a loan. Does taking out a loan make a company not-indie, or compromise a company's indie values?

    3. 1

      VC isn't the only source of capital. Debt can be a pretty amazing alternative if you use it right and you don't give up equity or control.

      It's a bit hard to find good lenders for SaaS though, so I put together Paper which lets you apply to a curated list of 100+ non-dilutive capital sources (e.g. loans, credit cards, factoring, etc.) to fund your SaaS companies growth. The "rating" is currently pretty unscientific and mostly based on the companies reputation.

      As an example, if your ARR is over $5M (lucky you!) Capital is one of the best options for a traditional loan, but if you're closer to $250k, you'd be better off with Triple Point

  3. 12

    Maybe slightly OT, but I've always wondered @csallen, would IH have survived in the long term if Stripe hadn't acquired you?

    1. 7

      Probably. IH was close to passing about $7K/month in revenue when I joined Stripe, and it only had to support me at the time.

    2. 2

      This is the most specifically on-topic question that could be asked in the context of the post.

  4. 5

    I don't have a problem with funding, or even with what you call yourself (as long as you're honest about it. Funding, like bootstrapping, should be a means to an end and not a religion or dogma.

    But I think it's a BIG problem for the future of business when funding gets the narrative (and lets be honest, it does, or we wouldn't be here having this conversation). Because a lot of people - especially the ones who haven't yet found the IndieHackers community or one like it - either forget or never learn that most businesses don't need outside funding to get started.

    I'm extremely bullish on the indie business scene's willingness to openly teach and share and mentor, so I'm going to keep my focus on the folks who want to become their own angel investors.

    1. 1

      most businesses don't need outside funding to get started

      Very true. It's also interesting to me that in most sectors, the businesses without funding don't aggressively define themselves in opposition to the business that have it. It's a phenomenon that you mostly tend to find in digital businesses, where the products are made of bits, which can be infinitely copied and distributed at scale — indie hackers on the web, indie game developers, indie music, etc.

      I think it's a direct reaction to the existence of powerful gatekeepers who stand in the way of independent creation and discovery. The less influential these gatekeepers become, the better. But I think that will necessarily undermine the basis of the counter-culture, too.

  5. 5

    Good overview, though it looks like opening an Overton window to widen the target audience of IndieHackers 😁

    1. 1

      You'll know that's my goal if I start writing about how being indie doesn't matter. 😉

  6. 4

    I just wanted to say thank you for posting this. It was very thought provoking for me. In a past life I founded a company which ended up being "the #1 rated yoga mat on Amazon." It was cash flow positive but before Clearbanc was in existence. What you wrote about alternative funding models (especially % of revenue models) really hit home for me.

    As an aside, I don't have a lot of confidence when it comes to posting on Indie Hackers so I wanted to thank you for a confidence boost! One morning I woke up and saw @CSAllen had liked something I posted and I can tell you I was walking around my WFH office with extra swagger all day long! Thank you for the confidence boost and encouragement! :)

    And most importantly thank you for this community!

  7. 3

    I agree with this post, though I also think that much of what you're talking about is debt funding rather than equity funding, because it's paid back from revenue, which means they're loans. I don't think people who've taken out loans have historically been excluded from the bootstrapper club.

    I used PayPal's new lending system to take out a $20,000 loan last year, which was paid back over the course of the following year by garnishing a percent of my PayPal revenue, with a flat fee of about $2400 added to the amount I had to pay back. I also took out an SBA loan last year for $100,000 to keep my company in business without laying anybody off.

    This kind of funding is generally ignored when people determine whether a company is bootstrapped or not, but it's not fundamentally different from the Lighter Capital, Clearbanc, and Earnest Capital models of paying the money back out of revenue over time with a premium added on top.

    If debt financing counts as "raising money", where's the line? Surely plenty of notable "bootstrapped" entrepreneurs have carried a credit card balance for a month or two. Just because companies like Earnest Capital are drawing attention in the startup world doesn't mean they're fundamentally similar to VC funds and should thus make you lose your bootstrapper status.

    In the same vein, TinySeed is equity financing and thus clearly does count as outside funding. Indie.vc is a hybrid between debt financing and equity financing, much like a standard convertible note. If you take their funding, you're no more bootstrapped than somebody who received a convertible note from an angel investor.

    With that said, I agree that if you're not on the standard path of funding that aims for a new and larger series round every couple of years, you can still call yourself indie. Basecamp actually did raise early equity funding from Jeff Bezos (the world's richest angel investor and human), and I still consider them indie.

  8. 2

    Great post Courtland! The space is definitely evolving, and there are always new ways to do things which are fascinating to follow. I think there are two important points missing, however, that are worth mentioning.

    The first is crowdfunding (speaking from experience), which is a very good way to raise money in the form of pre-sales rather than investment, in return for nothing other than delivering the product you want to build. We raised more than $350,000 to help start Ghost on Kickstarter without which it would have been very difficult to get started. In return, we were on the hook directly to our customers. Crowdfunding isn't possible for every business, but when it is it can create capital with very aligned incentives which is - in my opinion - far, far better than any equivalent investor.

    The second point I think it's important to make is that there is already a nefarious, dark underbelly of "indie investment" - including some mentioned in this post - which are quite simply not legitimate. Funding bootstrappers has become trendy in the last 18 months - and there are some people purporting to be "funding experts" who are not accredited investors, have never run an indie business at scale, and are little more than affiliate/dropshippers for someone else's fund.

    So far, the indie community has been extraordinarily bad at distinguishing the legitimate players in this space from the bullshit-artists — who are so often mentioned in all the same posts as if they are equal. They are not.

    I would encourage anyone and everyone who is considering taking investment from anyone at all to devote serious energy toward vetting any investor. Ask them for evidence of their experience and success. Do not settle for stories which sound compelling. Anyone can tell those. Demand data.

    Raising funding of any kind is always a long term partnership with an expectation that you will do what the people who gave you money tell you to. There is no way around that reality, despite the pipedreams which are sold. So make sure you really know who is going to be telling you what to do.

  9. 2

    amazing article @csallen and thanks for shouting us out at Clearbanc. Just wanted to give founders here a heads up that we are also funding b2b SaaS companies as well now in a similar fashion. Pure revenue share - no equity taken, or personal guarantee required. Happy to connect with anyone looking to grow on their own terms

    1. 1

      sounds interesting. what are your terms?

      1. 1

        hey Gercek - having someone on my team reach out with details on Monday

  10. 2

    Jason Fried of Basecamp ... who'd somehow found a way to make millions of dollars building SaaS apps without raising any funding.

    It's a common misconception to think that Basecamp never took any investment but in fact they did from Jeff Bezos.


    That said, it helps prove your point that's it's possible to raise funds and remain independent!

    1. 1

      But they did not want to get funded, and afaik Bezos made his way in there. They did not need this money and they only agreed on their terms, and because it was a personal investment from Jeff.
      This was a unique situation imo.

  11. 2

    Great overview of this scenario. After a year+ of bootstrapping we found ourselves in a position where, because of what we were building, we had at least another year until we'd see revenue. As a result we raised a little money from a couple of angels, and then recently a little more from institutional investors. We consider ourselves pretty lucky as our investors make no effort to define our path, and have used their networks to help us overcome many of the challenges we've faced. We're still just 2 co-founders working late nights from our home offices; but now we can continue to pay our server costs, and cover our living expenses, without having to rush out an incomplete product.

  12. 2

    Great post! A side note on Jason Fried (and DHH) at Basecamp: they got an investment for a few million dollars by Jeff Bezos.

    This helped them take risk off the table and go all the way with Basecamp.

    Just thought I'd mention it as it's an interesting path that could prove interesting for successful indie hackers.

    1. 1

      Wow, good dig.

      I think part of the reason why the sentiment of "indie = anti-investment" started was from DHH boasting how they built their awesome company without investment and fully remote, while criticizing everyone else doing things the old/boring way.

      1. 1

        I love DHH, he's brilliant. But I agree that he treats the world as so black and white, either you're with him or against him. I always thought life experience brought nuance to one's world view.

        1. 2

          He is great. Been following him since Ruby on Rails days. His tweets or remarks always make me think and he is usually not wrong. It's just the tone...lol.

  13. 1

    I think this evolution in startup financing has to do with the maturation of the software industry, in particular SAAS. In the early 2000s the playbook was still quite uncertain, and this uncertainty brought risk, and risk brought with it a need for venture capital. An asset class that was comfortable with binary outcomes.

    Now that the industry is maturing and we have more certainty you can see different classes of capital finding its way into the space. The debt funding of SAAS companies is particularly interesting. The fact that lenders feel comfortable underwriting loans to SAAS companies suggests there is a certain amount of predictability in the business model now.

  14. 1

    Excellent article. So valuable to know there are options for some of us who aren't going to 100x

  15. 1

    This many words about bootstrapping and talking about 2010-era models of entrepreneurial success and zero mention of Notch?

    He maintained freedom and bootstrapped to a $2B exit.

  16. 1

    Founderpath also just launched for this too. Standard terms:

    $200k, paid over 24 months, 15% interest

    No investors, no personal guarantees –– really good deal

    cc @RealNathanLatka


  17. 1

    Recently discovered what I think is an incredibly unique financing model, where investors essentially buy your future cashflows at a discount (not equity OR debt). Curious if anyone heard of or is using Pipe (or similar)?


  18. 1

    It's great to see investors not obsessed with hyper growth popping up to fill this void. I'm seeing first hand the pitfalls of a company hiring 100 people in a single year (50 to 150) - employee turnover doubling, shipping has slowed and finding PMF in new customer segments hasn't gone to plan.

    It's scarred me from thinking that raising money for my current side project will ever be a good idea unless I can find partners like the ones you have shared. Makes sense to me that companies will be more resilient later in life, if in the early days you can attract talent and make great products without throwing wads of cash at everything you do.

  19. 1

    Great post. It explains why I’ve gone the indie route and have never strongly considered VC funding.

  20. 1

    I'd also add Braavo Capital to your list of vendors (my day job). We are Clearbanc for mobile apps and games, feel free to reach out if any of you are building either.

  21. 1

    It has always mind boggled me, why investors would even want to impose their will on founders. When you make an investment, you're doing it because you believe the founder will do it, using his determination, creativity, and business knowledge. If the decides he/she requires help, he/she will come to you asking for it.

    However, it seems it's just the craving for power and the deep belief, that you yourself know everything better, which makes you force your will on a founder more often than the actual, true desire to help.

    Secretly, although I despise the VC approach mainly because of the above, I would love to take the shot, even under given circumstances. A tiny chance, the smallest hope to scale into the billion. Not even because of the billion, but because the billion is the symbol of truly changing the world. A measurable and omnipresent impact on the path of humanity.

    The price is likely failure and pretty sure something close to a burnout, but hell what a ride it would be!

  22. 1

    Thanks Courtland!

    One of things I rarely see missed here is that there are many ways to raise money. From Twitter and many of the comment threads here, it seems that people believe that if you raise money, the investors control your company and take a board seat. That is not the case.

    We have raised $1.5M from Y Combinator, Learn Capital, Project A, byFounders and other investors. These are large famous investors with a lot of deployed capital. How many shares do they own in our company right now? 0%. How many board seats do they hold? 0. How, you might ask?

    For those who read a bit further into the fundraising environment today you will see that a lot of funding is being done on Y Combinators SAFE (https://www.ycombinator.com/deal/). This means that the investors will only get shares in your company if you decide to raise money again later at a priced round.

  23. 1

    When I told my ex-colleagues I'll be starting my company, some of them would say "Congrats, you can finally become your own boss!". That doesn't make me feel happy. Instead, I felt they are suggesting I am not a team player and someone who'd rather make all the calls instead of cooperating with others.

    I think "indie" or not, one has to make up their own mind and negotiate to reach a decision. In today's business world, no one can force you to do something unless you agreed to it at some point. So while investors are notoriously greedy and controlling, how their involvement will impact a particular business really depends on if the head of the company (founder) has the knowledge and the skills to manage the relationship well. If not, feel free to stay away.

    But being indie shouldn't mean throwing a white towel and be like "this investment thing is too complex for me", or lifting your chin up and be like "I am too good for capitalism."

    Being an entrepreneur is about being realistic, not idealistic. Every option should be on the table for us to consider to become successful - which is creating an environment so we can work on what we love for as long as possible.

    In fact, the "pride" @csallen mentioned is what I disliked about some of the posts. To me, being humble and reasonable is the most important quality to become successful in business, as well as in life.

  24. 1

    I truly believe that these alternatives to funding are game-changing and will help foster many ideas and businesses. Also, I believe our community is using indie and bootstrapping as synonyms when they are two very different concepts.

    I believe that indie is a way of life in that: you build your business, you are the boss, you dictate your schedule and you are responsible for your payment.

    On the other hand, bootstrapping is a funding strategy. You grow your business by taking no funds upfront, keeping 100% of the equity and the control of your company and you de-risk your business by not having any downside at all.

    Venture Capital is another funding strategy - much like bootstrapping - but it is incompatible with the indie way of life. That's totally ok. You just have to understand the rules of the game BEFORE committing to it. And many Venture Capitalists are very open about these rules - most people just don't take the time to understand what are the consequences of some actions.

    I believe that many people confound indie with bootstrapping just because these funding options were unavailable to most Indie Hackers. You now can get a nice check to grow your business, with your schedule, your rules, your way of life with 10k MRR! Can you believe this?

    10k MRR is super hard to get to, I understand, but traditional loans are much riskier - some are not a limited liability, meaning you can get your personal belongings on the line - and much harder to get - you would have to have 50k or 60k MRR to have access to such.

    If these financial instruments keep evolving, there might be a time where we can have nice funding with 1k MRR!

    Also, we shouldn't demonize funding. It is YOUR choice to have it. But let me tell you this: it is far better to be ABLE to have it, and not need than to need and be UNABLE to have.

    I also believe that we shouldn't demonize Venture Capital. It is just a different way of playing the game. I've witnessed and held an 8% stake at a venture-funded business selling SaaS for Enterprises. I've witnessed all the terrible incentives we were given, such as being forced to raise a Series A within 12 months - when companies in the personal portfolio of the investor raised in 18-24 months and we didn't need the money; being forced to mature in aspects such as talent retention when we didn't have the cash to even HIRE the talent firsthand; among other things. But it is the game. The goal is becoming a billion-dollar company to pay for the portfolio.

    I can only say that I am truly delighted to see these alternatives to funding and I can't wait to see what will people build with this.

    1. 1

      well said. "don't demonize funding". when people don't realize how they could utilize it, they make up stories in their mind to make things appear unfavorable.

  25. 1

    Can we not worry about separating the terms and creating reasons for people in the community to exclude one another?

    1. 1

      Where we're headed in the long run is that online businesses will, for the most part, simply be referred to as "online businesses." There won't be much use for all the various distinctions based on how they're funded.

      But for that to happen, we first need a more equitable ecosystem for funding, with options available for almost all paths. We're getting there slowly, with investors funding non-high-growth approaches, and with lenders (banks, etc.) becoming more comfortable with online businesses.

  26. 1

    If you start as indie, claiming to serve niche customers only, and then take outside money to grow, you may get backlashes.

    This seems to be the current cultural trend. That's because we have seen too many companies do something to piss off the community after taking VC money.

    From @csallen article, two things may change the trend

    • More indie funding options with term sheets that favor independence
    • More successful indie businesses get funding without harming community, so people are more tolerant

    Update: I also included this article in the Tonians newsletter.

  27. 1

    It's a food chain. No problem with people moving up but (by your definition) stop being indie when you move away from financial independence. Regardless, indies still need to bootstrap to point where these VC/non-VC will fund.

  28. 1

    Very well said, thanks. I read that this is a new movement and the movement is friendly with Indie Hackers. But we need to wait for the "Will this work?" questions part. We need more information and data.

    1. 1

      As an individual indie hacker, I don't think you need to wait to see if it'll all work out. If you want to bootstrap, go for it. If you think it'd make your life easier to get funding from one of these newer firms, and if they have a model that doesn't conflict with your personal goals, go for it.

  29. 1

    Great post! I think obviously you have to give yourself credit, Courtland, for your contributions to the indie space!

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    There's also the case of SAAS with predictable revenues can tap into traditional funding like loans. There's something to be said about the approach that opposes outside funding though. The survivors will be very resilient. Pre-revenue is the largest hurdle. Then the next largest hurdle is ramen profitability. Then matching salaried employment etc. I think getting reasonable helping hands at each of those states can improve the odds for indie makers.

  31. 1

    Well put! And I couldn't agree more. We haven't been 100% "bootstrapped" although, we were for a number of years, and haven't raised a lot of money—almost none from VC. This allows us to keep the freedom and flexibility of an "Indie Hacker" while sharing the wealth with the few angels and investors that chose to join us for the ride.

    Also, I think 500 Startups (we were B20), for example, have started invested with this mentality. They have unicorns within their portfolio, but with the deals they have been putting through the accelerator over the last few years, to me, feels like they have found a business model that will pay back LPs with 5-10x returns.

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    Excellent post! Thanks for sharing. I look forward to this becoming a common source of funding in the future.

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    Very well said. I believe more and more investors will start seeing that they can still make a lot of money by betting on things that can give them 10x or 5x return with lower failure rate rather than having to bet only on things that give them 100x or 1000x return with a much higher failure rate.

    Having said that, I also believe that Bootstrapping is a great ethos to have, at least until you get to a certain point before you raise funds from investors. It's all about providing value to the customers and bootstrapping makes you optimize that early on. It's unhealthy to start with a pitch deck or pleasing to investors.

    Shameless plug: we are trying to provide the advantage of a network to early-staged bootstrappers at District - http://district.so/bootstrappers

  34. 1

    Great post, Allen! Powerful insight for the future 👏

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    This comment was deleted 2 years ago.

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