Why I Don't Take VC Money
Venture capital isn't the only way to build companies. Here's why I bootstrap.
Why I Don't Take VC Money
I've never raised venture capital. Not because I couldn't—I've had conversations, received interest, gotten term sheets. I've chosen not to.
This isn't an anti-VC rant. Venture capital is right for some businesses. It's just not right for mine.
Here's why.
The VC Model
Venture capital has a specific logic:
- Fund structure: VCs raise money from LPs (pension funds, endowments, wealthy individuals) with a 10-year fund life
- Return requirements: They need to return 3x+ the fund to be successful
- Portfolio math: Most investments fail, so winners must be huge (10x-100x returns)
- Growth imperative: Companies must grow fast enough to hit those return multiples
This creates specific incentives:
| VC Incentive | What It Means for Founders |
|---|---|
| Need big outcomes | Small wins don't matter |
| Time pressure | Growth now, profitability later |
| Portfolio approach | Your company is one of many bets |
| Exit focus | Build to sell, not to keep |
None of these are evil. They're just the math of the model.
Why It Doesn't Fit
I Want to Build Lasting Companies
The VC model optimizes for exits—acquisition or IPO within 7-10 years. I want to build companies I could run for decades.
Blackbox Holdings isn't building to flip. We're building a portfolio of companies that generate cash flow, serve customers well, and compound over time. That's a different game than "grow fast and exit."
I Want to Stay in Control
Taking VC means giving up control. Board seats, protective provisions, liquidation preferences—the legal structures ensure investors have power over major decisions.
I've seen founders pushed out of their own companies, forced into acquisitions they didn't want, or pressured into strategies that destroyed what they built. No thanks.
I Don't Need Hypergrowth
VC-backed companies need to grow 3x+ annually to hit return targets. That growth rate requires:
- Aggressive (often unprofitable) customer acquisition
- Rapid hiring (often ahead of need)
- Market expansion before current markets are solid
- Sacrificing unit economics for growth metrics
Our companies grow at sustainable rates. DuckDuckSign doesn't need to be a unicorn—it needs to be profitable and serve customers well. Same with Alignmint, Roladexter, and Band Voyage.
I Can Fund It Myself
The honest reason many founders raise VC: they need the money. I don't.
Selling The Pressure King gave me capital. Revenue from existing products funds new development. The contract-first model means customers fund product development.
When you don't need outside money, you shouldn't take it just because it's available.
The Bootstrapping Advantages
Profitability Focus
Without VC pressure, we can focus on profitability from day one. This creates:
- Sustainability: Companies that survive downturns
- Optionality: Profitable companies have choices
- Discipline: Every dollar matters when it's your dollar
Customer Alignment
VC-backed companies serve two masters: customers and investors. When those interests conflict, investors usually win.
Bootstrapped companies serve customers. Period. If customers are happy and paying, the business works. No other constituency to satisfy.
Long-term Thinking
We can make decisions that pay off in 5-10 years, not just the next funding round. This means:
- Investing in quality over speed
- Building relationships, not just transactions
- Choosing sustainable growth over hockey sticks
Flexibility
No board approval needed. No investor updates. No pressure to hit arbitrary milestones.
If we want to pivot, we pivot. If we want to slow down, we slow down. If we want to try something weird, we try it.
When VC Makes Sense
I'm not saying VC is always wrong. It makes sense when:
Winner-take-all markets: If being second means being dead, you need to grow fast. VC provides the capital for land grabs.
Capital-intensive businesses: Hardware, biotech, infrastructure—some businesses require massive upfront investment before any revenue.
Network effects: Platforms where value increases with users need to reach critical mass quickly.
Founder circumstances: If you don't have capital and can't bootstrap, VC might be the only path.
None of these apply to what we build. B2B SaaS doesn't require winner-take-all dynamics. Our products aren't capital-intensive. We can reach profitability with modest customer bases.
The Trade-offs
Bootstrapping isn't free. The trade-offs:
Slower Growth
Without VC capital, we grow slower. Competitors with funding can outspend us on marketing, hire faster, and move into markets before we're ready.
We accept this. Sustainable growth beats fast growth that flames out.
Limited Resources
We can't hire ahead of revenue. We can't spend on speculative R&D. Every investment must pay off relatively quickly.
This creates discipline, but it also creates constraints.
Personal Risk
When the company's money is your money, failure hurts more. There's no "it was the investors' money" cushion.
I'm comfortable with this risk. Not everyone is.
Smaller Outcomes (Maybe)
The biggest companies in the world were VC-backed. If your goal is building a $100B company, bootstrapping probably won't get you there.
My goal isn't a $100B company. It's a portfolio of profitable, sustainable businesses that I enjoy running. Different goals, different paths.
How We Fund Growth
Without VC, how do we fund development?
Revenue
The old-fashioned way. Customers pay for products. Revenue funds operations and growth.
Contract Work
The contract-first model: get paid to build something, then productize it. Customers fund product development.
Profits from Other Ventures
The portfolio approach means successful companies fund new experiments. DuckDuckSign profits can fund Roladexter development.
Personal Capital
When needed, I invest my own money. This keeps incentives aligned—I only invest in things I believe in.
The Path Forward
Blackbox Holdings will likely never raise VC. We might raise debt for specific purposes. We might bring on strategic partners with aligned interests. But traditional venture capital doesn't fit our model.
This limits some possibilities and opens others. We won't build the next Google. We might build a dozen profitable companies that serve customers well and last for decades.
That's the trade I'm making. And I'm good with it.
Venture capital is a tool. Like any tool, it's right for some jobs and wrong for others. Know what you're building and choose your funding accordingly. For us, bootstrapping is the path.