$150k sales in 6 months for our mobile app. Direct Competitor raised $3.5M. We've had just as many users and volume as them. Should we keep bootstrapping or start seeking for Venture capital?
Whenever I have a team in front of me, I generally ask them this:
Do you want to chase the unicorn, or ride it?
If you take VC money, you will be chasing the unicorn for the rest of your time with the company. You will be indebted to someone else to make back that money. Sure, they've raised $3.5M. The *bet* is that they'll be able to earn $35M in *revenue* to pay their investors back sometime within the next few years, and if they don't, then there's going to have to be more cash pumped into them until they do. The cycle will continue until they die.
You, however, have been making a relatively good amount of sales for low overhead. You may even be able to get a business loan at a lower rate of interest from the SBA with that amount of cash gen (they're giving very nice 25 year term loans right now) and now have to worry about investors breathing down your neck for a 10x return.
Then, you can scale at your own pace and own your own company entirely, and maybe even grow enough to go to an ESOP at some point, or sell to someone at a much better return.
I don't know about you, but riding the unicorn sounds way better than chasing it.
