Starting a company requires to think about how you will get off the ground financially. In most cases, money available is not enough to fund all operations of business until the profits start flowing. You have three main options to help you finance your business, and they include
- Borrowing from close friends and relatives; you can ask for a loan or give them a stake in the company.
- Bootstrap, which simply you fund it with your savings or contributions from other founding members.
- Angel investors and venture capital; they are semi-professional and professional start-up investors consecutively.
Here are some successful companies that did not raise venture capital.
This is one of the most significant dating sites, and it was founded by Markus Frind. He created it in his apartment. He had worked on a few other tech start-ups before establishing PlentyofFish. Today the site has over 38 million signups with more than six billion views every month. This company offers free services but earned a lot of income from advertising. Frind got the first check from Google AdSense for $1000. ReadWriteWeb wrote in 2007 that the company was worth about a billion dollars. He hired people to work for him and the site gave him hundreds of millions as profit.
Github is a coding company created in 2007 and was bootstrapped by the owner, until in 2018 when Andreessen Horowitz invested a hundred million dollars.
Indeed is a company founded by Paul Forster and a confounder. A few years later, the two raised five million dollars. But, the company was sold this year at a price ranging from $750 million up to $1billion.
This company was bootstrapped for six good years until Matias Corea and Scott Belsky managed to raise $6.5 million. There are more than a million projects published in Behance the last few months, but the first one million projects were uploaded within four years. In 30 days, Behance gets about 30 million views.
Adam Rich and Ben Lere bootstrapped the Thrillist from 2005 until 2018. The company is expected to produce about $60 million as profits this year.
It was a clothing start-up bootstrapped by the owner, Sophia Amoruso. She started on eBay and managed it for more than five years before getting outside capital. The e-commerce company grew and increased profit margins up to $30 million yearly revenues. Nasty Gal has raised $50 million. Initially, before the creation of this company, the founder, Amoruso did odd jobs to make an income.
This company was founded by Keith Teare and Mike Arrington in 2005. It became famous and attracted many readers all over the world. It was the most read tech site and was bought by AOL at $30 in 2010. At that time Arrington owned 85% of the company. He was a tech lawyer before they created the TechCrunch. Arrington had also worked for various start-ups such as Achex, which is an online company that deals with payments.
Gawker is a media company founded in 2002 by Nick Denton. He sold his company First Tuesday, a business that dealt with events planning and management to get capital to fund Gawk. The business’s headquarters was at his home for years until 2008 when he rented an office. Today, the company is estimated to be worth $150 million.
People who initially worked for Facebook founded Storm8. It is a gaming company launched in 2009. Games from Storm8 have been downloaded over 300 million times in over 100 million devices.
All these companies did not raise venture capital to get started or grow their companies. They used their little savings to build these famous companies.