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Fundraising: Pro's & Con's of raising out of boostrap for a $1m+ ARR company that grew 300% last year
BC
BC
Brian Carruth, Tech Founder, Agile Development, Startup Funding answered:

Early on, I often thought the same thing - once you're ready to invest, I won't need you. In hindsight, I think that's a narrow view.

You have to look at it from their perspective. Investors aren't looking to put money into an exploration project. They are interested in putting money into a business that will use it to grow more quickly than they otherwise could have. If you grew 300% last year, could you have achieved 500% with additional capital, a more robust marketing campaign or through adding employees?

Also, just because a concept works well at a small stage, doesn't mean it will be successful as it scales up. Growth slows, customer acquisition becomes harder and a company's culture changes. Those are all risk factors for investors. Bootstrapping is great, but you should consider bringing on investors if they can provide capital as well as guidance, connections to clients or other valuable intangibles that will take your company to the $10M+ mark.

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