In today’s episode of The Startup Chat, Steli and Hiten talk about Fundraising for startups.
When it comes to funding a startup, previously, you had two options to choose from self-fund your start or get VC funding. Now times have changed and there are more funding options available to founders.
In this week’s episode, Steli and Hiten talk about how there are so many options for fundraising, self-funding versus VC funding, why it’s important to do what’s right for you and more.
Time Stamped Show Notes:
00:00 About today’s topic.
00:31 Why this topic was chosen.
00:58 How there are so many options for fundraising.
01:23 Self-funding versus VC funding.
03:22 How Steli and Hiten have always preferred self-funding to VC funding.
04:05 How the world has changed.
05:00 An example of a company that took VC funding after discouraging it.
07:49 Why it’s important to do what’s right for you.
09:03 Why there are different ways to be successful at anything.
00:00 How there are more funding options available today.
3 Key Points:
There've never been that so many options.We don’t hate VC funding.Business is THE religion.
Steli Efti: Hey everybody, this is Steli Efti.
Hiten Shah: And this is Hiten Shah. Today on The Startup Chat, we're going to talk about something that we know ends up being on people's minds off and on, especially if they haven't done it yet. This is for all of you that haven't done this yet and for some of you that might be doing it again. The topic is basically we wanted to check in on the fundraising climate when it comes to startups raising money. We both get to see that all the time in different ways. We also get to see self-funded businesses. So yeah, what are you seeing Steli?
Steli Efti: Well, I do see that there are more options out there today than probably ever before. It used to be that you had to decide if you wanted to be a venture-funded startup and go and raise a C round, series A, series B, series C, just do the whole typical VC model of raising money, going for hyper growth. Or you were deciding that you wanted to be a self-funded startup, a customer-funded startup, a bootstrapper, a micropreneur, whatever term you want to use, which basically just meant you were generating or trying to generate revenues and profits ASAP and you weren't interested in raising money from the outside world. And typically these two worlds where... And traditionally had been very hardened camps. One camp thinks the other one is dumb or bad basically. The VC funded startups would think that the self funded ones are thinking too small and the self-funded ones thought that VCs are evil and all these VC funded startups, I don't know, are full of bullshit and a bad quality of life and are going to whatever.
Hiten Shah: And the thing is it's funny, they say it's hardened camps, or it's been hardened camps. I have never said anything against VC funding. I've raised money and people think like, "Oh, he's a self-funded founder and hates VC money or something." I'm like, "No, that's not true. That'd be a very absurd way to think about business, in my opinion." And even the camps, I think it's absurd. It's like in life what they call a duality. You act like there's only two options. There's this duality in your life between good and bad. One's good and one's bad. It's furthest from the truth.
Steli Efti: I love that you're saying this because it's so true. I guarantee you, our very listeners that are listening to this very episode would have thought that both you and I are totally against VC, right?
Hiten Shah: Yeah.
Steli Efti: Maybe with you even more than with me, just because they think you're a better person probably.
Hiten Shah: No way,