Ask HN: Do bootstrapped billion-dollar companies exist?

https://news.ycombinator.com/item?id=8081987

by mdunn • 12 years ago

107 134 12 years ago

news.ycombinator.com

It seems like all companies that are valued at $1BN or more raised money in their early days.

selectout• 12 years ago

Craigslist I believe was bootstrapped and while it's still private I believe it's valuation is north of $1 billion.

wsh912• 12 years ago

I'm part of one, Atlassian, which was last valued at $3.3 billion and started with $10,000 in credit card debt, taking $60 million in venture funding eight years in.

(For more on valuation and the background, http://www.businessinsider.com/atlassian-helps-employees-poc... )

ctdonath• 12 years ago

Does "bootstrapped" include "investors begging to throw money at it"? or purely self-made?

antoinec• 12 years ago

To me, the strict definition would be "purely self made". But I guess it's reasonable to say that a company that has been around and very successful for 8 years, without external investment , is bootstrapped.

chatmasta• 12 years ago

The question asks for billion dollar bootstrapped companies. Almost by definition, if a company is worth a billion dollars, investors will be "begging to throw money at it." :)

voltagex_2• 12 years ago

Very sad to see you guys leaving Australia. Best of luck!

davidbanham• 12 years ago

They're not going anywhere. The recent change to the corporate structure has been for tax purposes. They will continue to grow overseas, but I don't see them closing Sydney any time soon.

joshjdr2• 12 years ago

Doesn't $60 million in venture capital make this NOT an example of a bootstrapped company?

cheald• 12 years ago

You don't think that surviving for 8 years without raising funding counts as "bootstrapped"?

optimusclimb2• 12 years ago

Thanks for building a shitty company and product that I'm forced to use. Enterprise! Seriously. Meditate on that word.

We were actually forced by my company to move our "How to use this repo, get it up and running, etc" documentation out of README.md at the root of our github repos, to the Atlassian Wiki because, "this is how we do things now."

Fuck your terrible editor that adds random double spacing, and in general, fights me at every turn.

And the fact that at almost every standup, or planning meeting, we end up fighting some Jira issue that makes it obscenely hard to plan the way we want.

Your software makes it harder for me to get my job done. It is not good. I don't care if HN down votes me to oblivion. Your company has failed to make a good product. If you've read this, I feel better.

ownagefool2• 12 years ago

The reason HN will downvote you isn't because they agree or disagree on whether or not jira and confluence are crap but it's because you clearly should be pointing the blame at whoever made the call force it on you, which isn't Atlassian.

Oh and "Enterprise" is the problem. Let's use complicated shit that doesn't really solve anyones use cases particularly well, but manages to fudge along for everyone so seems like a big win for idiotic top down managers.

EliRivers• 12 years ago

Your software makes it harder for me to get my job done

If the tool isn't helpful, don't fucking use it. I can draw you a diagram if that would help. If someone is forcing you to use an unsuitable tool, where do you think you should direct your opinion?

jlangenauer• 12 years ago

37Signals (Yes, yes, I know it's called Basecamp now) would be valued north of $1b. Though they did take an investment of $1m from Jeff Bezos at one point.

kloncks• 12 years ago

Why would it be valued north of $1b?

the55• 12 years ago

well... there's this: https://signalvnoise.com/posts/1941-press-release-37signals-...

scrozier• 12 years ago

Out of curiosity, how do you arrive at this valuation?

hbbio• 12 years ago

Microsoft raised just $1M.

Ok, it's off-topic as this was in 1981, but the valuation is way north of $1bn...

pacaro• 12 years ago

And, also relevant is that MS was founded in 1975

n00b101• 12 years ago

the valuation is way north of $1bn...

That is an understatement ... MSFT's current market cap is $366 bilion and the all-time high market cap was $616 billion in December 1999.

wmf• 12 years ago

Ubiquiti. The founder wrote a retrospective on it: http://www.rjpblog.com/2012/06/11/post-3-bootstrapping-strat...

31reasons• 12 years ago

I think ESRI was also bootstrapped.

therealarmen• 12 years ago

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-$...

gsharma• 12 years ago

WhatsApp actually raised closer to $60M [1]

[1] http://www.crunchbase.com/organization/whatsapp

vecter• 12 years ago

Is 37Signals worth $1B?

shreve• 12 years ago

Actually, they're valued at $100B.

http://signalvnoise.com/posts/1941-press-release-37signals-v...

applecore• 12 years ago

That story probably isn't true. Why would WhatsApp raise money if they weren't planning to spend any of it?

danielharan• 12 years ago

For help selling the company? I'm sure there are a few VCs that know all the corp dev people and could more than double the final price.

apaprocki• 12 years ago

Bloomberg was started by Mike with his own money from his Salomon Brothers departure.

trestletech• 12 years ago

Pure conjecture, but is it reasonable to think that bootstrapped companies might be more likely to be bought out than ones backed by major VC bucks?

I suspect a disproportionate number of bootstrapped companies that fall into the might-become-$1BN category get an offer they can't turn down at some point before they arrive.

GoRudy• 12 years ago

Agreed.. bootstrapped companies mean a much higher % of the business is owned by founders (if not all of it) resulting in lower acquisition prices needed for it to still be huge outcome for the founders.

hpagey• 12 years ago

Yes, AirWatch was bootstrapped and was founded in 2004. They raised a huge round 200 m in 2013 I believe. IT was sold to Vmware for 1.6 B dollars.

gatehouse• 12 years ago

Well I'm reaching back pretty far but I believe Standard Oil was mostly debt financed in the early days: http://en.wikipedia.org/wiki/Standard_oil . The company grew with the oil industry. In a growing market, slower growth allows less aggressive financing.

sbisker• 12 years ago

GoDaddy was entirely bootstrapped before a large chunk of it was sold to private equity firms in 2011. The founder self-funded it based on a $MM sale of a previous company, though - so they're awfully nice boots to be strapped up by. :)

As a result of being bootstrapped, the 2011 sale single-handedly put its founder, Bob Parsons, on the Forbes billionaires list: http://www.forbes.com/profile/bob-parsons/

dabent• 12 years ago

I am pretty sure Parson's previous company, Parson's Technology, was boostrapped as well. He used, and apparently nearly lost, the millions he earned on that sale to fund GoDaddy until it was profitable.

spaldingwell• 12 years ago

GoDaddy is actually not profitable.

In 2013 the company lost $199.88 million and in 2012 they lost $279 million .

http://techcrunch.com/2014/06/09/godaddy-files-for-100m-ipo/

(just a minor correction as I am not the biggest fan of GoDaddy)

frankdenbow• 12 years ago

Shutterstock: http://www.inc.com/christine-lagorio/bootstrappers-bible-shu...

w1ntermute• 12 years ago

Valve Corporation is valued at a couple billion USD and was bootstrapped using the founders' equity from being early MS employees. It's still privately owned.

andrewljohnson• 12 years ago

Plenty of Fish? I think I read they were making hundreds of millions at one point, per year, with a handful of employees. That would put their valuation north of a billion most likely.

kephra• 12 years ago

Wizards of the Coast was bootstrapped without nearly any cash, in the unusual way that artists had been payed in shares. It was sold to Hasbro for US$325 million in 1999.

icedog• 12 years ago

Spanx

http://www.forbes.com/global/2012/0326/billionaires-12-featu...

beachstartup2• 12 years ago

http://en.wikipedia.org/wiki/SAS_Institute

throwaway5752• 12 years ago

No idea why you were downvoted... SAS is a pretty good example.

beachstartup2• 12 years ago

Also, Oracle was completely self-funded/financed for many many years. Or at least that's what the book says.

tejasm• 12 years ago

Infibeam - www.infibeam.com is an India based ecomm company and was totally bootstrapped. They're worth > $5B

fred_durst2• 12 years ago

I'm not sure if you would call starting in NIH raising money, but how about SAS Institute?

TallGuyShort• 12 years ago

I don't know that they're quite at $1BN dollars yet, but Qualtrics in Provo, Utah bootstrapped for a very long time and achieved pretty impressive success before accepting (not needing) external funding. Their CEO has gone quite a few articles and interviews about it, so it's a good use case to learn from.

lauradhamilton• 12 years ago

Braintree was bootstrapped until pretty late

reboog711• 12 years ago

Wouldn't LucasFilm count?

eappleby• 12 years ago

Shutterstock didn't take any funding for I believe 8 years (and when they did it was at a huge valuation) and then this year they IPO'd for >$1B. Jon Oringer, the CEO of Shutterstock, is a big fan of bootstrapping.

http://www.inc.com/christine-lagorio/bootstrappers-bible-shu...

josephpmay• 12 years ago

Quizlet isn't quite worth a billion yet (I think they're somewhere between $100 - $500 million) But they haven't taken a penny of investment money.

dirtyoldman• 12 years ago

Virgin Group was born out of Richard Branson's Virgin Record stores. The stores started as a mail-order business, advertising in his own magazine, which he started at 16. The name Virgin is a reference to his and his business partners' inexperience in business when they opened their first record store.

stillmotion• 12 years ago

But majority of their long-term success has been attributed to their ability to borrow money from larger banks like City. The growth of Virgin Records could not have happened without their battles with the banks.

andy_ppp• 12 years ago

That's not what his autobiography says... Says when he was running the 'Student' magazine and had the opportunity to move on they needed a name and were brain storming. Someone piped up with "what about Virgin, because there aren't many of those left around here?".

greenyoda• 12 years ago

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?

danvoell• 12 years ago

Another non-technology company, longtime in the making is Arthrex - http://www.businessobserverfl.com/print/ENTREPRENEUR-OF-THE-...

"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"

dadiomov• 12 years ago

I don't know if this counts, but Veeva Systems IPOd at north of $4 billion on a grand total of $4m in funding

tomashertus• 12 years ago

I'm not 100% sure, but I think IKEA was bootstrapped for pretty long time. But I can't find any reference about this:(

randall• 12 years ago

To my knowledge it's still privately held.

thematt• 12 years ago

By a charity.

http://www.economist.com/node/6919139

mongol• 12 years ago

This is true. Also Tetra Pak.

thirdreplicator• 12 years ago

I think McKinsey & Co might be bootstrapped. They made $7.8B in 2013, but it was founded almost 100 years ago. They reached $1B in 1991, which was 65 years after it was founded.

MrSourz• 12 years ago

Desire 2 Learn, a Kitchener, Canada based startup raised 80 million in 2012 and was founded in 1999. Their exact valuation may be below 1BN, but not small.

jonnathanson2• 12 years ago

Walmart was bootstrapped, starting with a single five-and-dime store. It went public, but to the best of my knowledge, never took on institutional investment prior to that. Say what you will about the company and its business practices today, but the founder's accomplishment was remarkable.

sayemm2• 12 years ago

Sam Walton's biography is one of the best business books I've ever read: http://amazon.com/Sam-Walton-Made-In-America/dp/0553562835

What's really instructive about his story is that he started his first retail store when he was in his mid-late 20s, sold that and earned his first stripes in his early 30s. And it wouldn't be a decade later until he started Walmart in his early 40s.

Walmart was a culmination of several decades of Walton's life that he dedicated to mastering, and dominating, retail.

hollerith2• 12 years ago

I do not understand. When you write, "earned his stripes," what exactly do you mean?

fred_durst2• 12 years ago

One of the greatest(meaning influential) deals in the 2nd half of the 20th century, in my opinion, was Walmart's acquisition of Big K

http://www.nytimes.com/1981/06/23/business/kuhn-s-big-k-stor...

dlokshin• 12 years ago

Esri is completely bootstrapped, not in a tech hub, and doing north of $1B / year in revs.

http://en.wikipedia.org/wiki/Esri

slowing13• 12 years ago

I believe Mark Shuttleworth owned 100% of his company Thawte when he sold it for $575M to Verisign in 2000. In today's dollars it would be near 1B.

aaronbrethorst2• 12 years ago

GitHub's valuation 2 years ago was $750mm. I'd be shocked if they hadn't cracked the $1bb marker yet.

http://allthingsd.com/20120709/github-valued-at-750m-with-fi...

argonaut2• 12 years ago

GitHub raised $100M from Andreessen.

doobiaus• 12 years ago

Github was bootstrapped for 4 years before taking funding. Eventually everyone does when they need to grow rapidly.

macguyver• 12 years ago

Chobani is a hugely profitable, capital-intensive billion-dollar company that was 100% bootstrapped.

http://hbr.org/2013/10/chobanis-founder-on-growing-a-start-u...

chadkruse2• 12 years ago

I think the most interesting part of this post's comments is how everyone views bootstrapping differently. In Chobani's case, per the article, they didn't take in any outside equity, but they did take in outside investment. It just happened to be structured as debt.

Nothing wrong with that, just found it interesting. Good reminder that there are a number of different ways to grow an amazing company.

markolschesky• 12 years ago

Epic, which delivers most of the Electronic Medical Records software for large healthcare organizations in the United States, has never raised any funding. With revenues over $1.7 billion a year, their valuation is certainly greater than $1b.

chadkruse2• 12 years ago

Raised $70k: http://www.forbes.com/sites/zinamoukheiber/2012/04/18/epic-s...

Regardless, still a great story.

mrbrandonking• 12 years ago

There's a story on "The Daily WTF" that's almost certainly about Epic Systems. Epic apparently uses an obfuscated 60's-era language called MUMPS.

See http://thedailywtf.com/Articles/A_Case_of_the_MUMPS.aspx

I found another article that says Epic prefers to hire fresh college graduates because they're easier to mold into the "Epic Way."

kylemhill• 12 years ago

I used to work at Epic, but it was over six years ago at this point. Their entire stack at the time was MUMPS and VB6. No idea if that's still the case, mind you -- there were some modernization efforts underway when I left. Although from what my friends that work at Epic hospitals tell me about their software, it likely hasn't changed much.

And I almost certainly got hired there because I actually knew MUMPS from a previous job. Of the developers they hired during my cycle, every one of them was on an H1-B or fresh out of Carnegie Mellon or MIT; meanwhile I was a kid with a sub-3 GPA from a liberal arts school with a Political Science degree.

(If you do some light searching, you can find another famous story on TDWTF that I wrote about MUMPS.)

MattBnB• 12 years ago

YES!

http://businessandbootstrapping.com/8-successful-startup-str...

bprieto• 12 years ago

Zara started as a pop and mom shop.

stevewilhelm• 12 years ago

Spanx [1]

[1] http://www.forbes.com/global/2012/0326/billionaires-12-featu...

ajross• 12 years ago

Can't believe no one has mentioned Hewlett-Packard or Apple Computer...

Mz• 12 years ago

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/ab...?

http://www.deere.com/wps/dcom/en_US/corporate/our_company/in...

proee• 12 years ago

Digi-Key Corporation. Founded by Ronald Stordahl in 1972. http://en.wikipedia.org/wiki/Digi-Key

shanacarp• 12 years ago

Yes. Epic Systems was/is purely bootstrapped. Never took a dime of external money.

markjspivey• 12 years ago

Isn't apple and Microsoft?

joshu• 12 years ago

I heard that EMC never raised VC

comatose_kid• 12 years ago

I believe Mu Sigma qualifies.

2D• 12 years ago

In Asia we have quite a few if relying on your family is still bootstrapping.

mcot2• 12 years ago

Bloomberg was bootstrapped.

macco• 12 years ago

Lots auf Germany's hidden champions are bootstrapped after World War II. Most famous example aldi, they own trader joes in the us.

andrewdubinsky• 12 years ago

Dell, Apple, Cisco, Oracle, & Intel. Weren't those all bootstrapped?

hollerith2• 12 years ago

According to a New Yorker article currently on HN, Intel's founders took VC investment as soon as they decided to quit Fairchild and start their own company.

Lennu• 12 years ago

Multi-millionaire Mike Markkula provided essential business expertise and funding of $250,000 during the incorporation of Apple.

nuetrino• 12 years ago

Mojang could be a future billion-dollar company. I dont think it was ever funded?

xerophtye• 12 years ago

Does Facebook count in this? I mean they did start with Eduardo Saverin's $10k as bootstrap money no?

SofiaBerlin• 12 years ago

How about ALDI?

projectramo2• 12 years ago

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.

daiidgo• 12 years ago

Actually, if you have multiple owners you really want to have your company appraised on a regular basis (every 6 months if you're beyond a little startup). Reason being, if you should happen to encounter an event that triggers a buyout right of one of your members/shareholders/partners, you want a contractually accepted valuation to control the cost of the buyout. Well planned valuation procedures can really help avoid costly litigation over the value of an ownership interest.

Appraisers can value your company above a billion dollars without you ever taking on an outside investor. If someone does go to invest, they're going to hire their own appraiser (or entire firm of economists) to determine how much your company is worth prior to investing.

Appraisals aren't free, but they have significant long term benefits. Their estimate of your company value tends to be as accurate as any potential investor's estimate (competing biases on other sides of the ideal valuation).

projectramo2• 12 years ago

That makes sense, and I agree with you. I will point out that those appraisals are usually kept private so we still have to base our valuations on announced deals. (In the original context of trying to value a bootstrapped company).

hashtag• 12 years ago

Microsoft...

In a talk given by Bill Gates, he mentioned that Microsoft only took on an investment once and it wasn't because company needed money but because Bill Gates wanted to bring on an investor to be on Microsoft's board of directors and that was the only way to do so. Supposedly that investor has been on the Microsoft board for decades.

Obviously because they technically did raise funding, might not satisfy the question

Ask HN: Do bootstrapped billion-dollar companies exist?

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