8 ms·
Ask HN: Do bootstrapped billion-dollar companies exist?
It seems like all companies that are valued at $1BN or more raised money in their early days.
- hpagey 12y agoYes, 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.
- selectout 12y agoCraigslist I believe was bootstrapped and while it's still private I believe it's valuation is north of $1 billion.
- wsh91 12y agoI'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-pocket-150m-2014-4 http://www.businessinsider.com/atlassian-helps-employees-poc... )
- ctdonath 12y agoDoes "bootstrapped" include "investors begging to throw money at it"? or purely self-made?
- antoinec 12y agoTo 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 12y agoThe 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_ 12y agoVery sad to see you guys leaving Australia. Best of luck!
- davidbanham 12y agoThey'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.
- joshjdr 12y agoDoesn't $60 million in venture capital make this NOT an example of a bootstrapped company?
- cheald 12y agoYou don't think that surviving for 8 years without raising funding counts as "bootstrapped"?
- eloisant 12y agoThe important question is: did it get to the billion dollar level before raising funds?
- logicallee 12y agoI'm sorry, that's a ridiculous question. This is like asking if any companies have made it to $100M without ever opening a bank account, but doing everything with cash (while keeping a strong paper trail, being totally above-board.) A ridiculous question. If you never take any money you don't even have a valuation, so what makes you a billion-dollar company anyway? You're just a $0 company that happens to be pulling $10M in profit per year (for example.) I don't mean the question that started this thread is ridiculous (though it's unusual) - I just mean that the example given is a perfect answer, and your follow-up question is kind of ridic (IMHO.) Or at any rate not "the important question."
- ownagefool 12y agoUh, if you're pulling in $10M in profit per year you definitely have a value greater than $0 and that's pretty easy to work out. It's the companies forever making a loss having a positive valuation besides their constant losses that defy logic.
- logicallee 12y agoit might be pretty easy to work out but that's not how valuations at a billion dollars work. Only actual transactions in shares would establish this kind of a valuation. I mean just consider our specific example: at $10M profit, the price per earnings if you purport to be a billion dollar company, is 100. So, no alternative accounting metric would ever give you a billion-dollar valuation (assuming you bootstrapped, which implies high margins and low infrastructure and other costs, so really nothing would give you the billion-dollar valuation.) I'm not an accountant, but from how I've experienced things, only if the company sells shares and establishes a valuation thereby can value the company at $1 billion in our example.
- optimusclimb 12y agoThanks 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.
- ownagefool 12y agoThe 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.
- HeyLaughingBoy 12y agoActually I downvoted him for pure rudeness, plain and simple.
- EliRivers 12y agoYour 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?
- optimusclimb 12y agoYes, please draw this diagram. Do it in Confluence while you're at it. Yes, it sucks that I'm forced to use a crappy tool. That happens all the time in the software world. Sure, you can take the HN fantasy path and quit every job you have every time you disagree with something, but you'll never make any real progress that way. I'm still working hard to ship a good product in spite of the fact that some aspects of how I build it will be sub-optimal. However, if the people that work on shitty products would fight back a little bit more, perhaps those of us forced to use them wouldn't find it so distasteful.
- jlangenauer 12y ago37Signals (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 12y agoWhy would it be valued north of $1b?
- the55 12y agowell... there's this: https://signalvnoise.com/posts/1941-press-release-37signals-valuation-tops-100-billion-after-bold-vc-investment https://signalvnoise.com/posts/1941-press-release-37signals-...
- scrozier 12y agoOut of curiosity, how do you arrive at this valuation?
- hbbio 12y agoMicrosoft raised just $1M. Ok, it's off-topic as this was in 1981, but the valuation is way north of $1bn...
- wmf 12y agoUbiquiti. The founder wrote a retrospective on it: http://www.rjpblog.com/2012/06/11/post-3-bootstrapping-strategies-part-1-the-compromise-between-today-and-tomorrow/ http://www.rjpblog.com/2012/06/11/post-3-bootstrapping-strat...
- 31reasons 12y agoI think ESRI was also bootstrapped.
- therealarmen 12y agoLots 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/ http://avc.com/2012/09/indeed/ [2] http://forbesindia.com/article/the-worlds-billionaires/the-$19-billion-poker-game-inside-the-facebookwhatsapp-megadeal/37461/0 http://forbesindia.com/article/the-worlds-billionaires/the-$...
- gsharma 12y agoWhatsApp actually raised closer to $60M [1] [1] http://www.crunchbase.com/organization/whatsapp http://www.crunchbase.com/organization/whatsapp
- vecter 12y agoIs 37Signals worth $1B?
- shreve 12y agoActually, they're valued at $100B. http://signalvnoise.com/posts/1941-press-release-37signals-valuation-tops-100-billion-after-bold-vc-investment http://signalvnoise.com/posts/1941-press-release-37signals-v...
- catshirt 12y agoi'm not typically a fan of the 37signals blog posts which come off to me as arrogant. this one makes me laugh though; it does a really effective job of poking fun at the broken parts of the VC model.
- brianfitz 12y agoThat article was intended to be a joke. 37signals (now Basecamp) is private and doesn't publicly announce revenue or profits -- though Jason has acknowledged both are in the millions.
- deleted 12y ago[deleted]
- apaprocki 12y agoBloomberg was started by Mike with his own money from his Salomon Brothers departure.
- trestletech 12y agoPure 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 12y agoAgreed.. 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.
- gatehouse 12y agoWell 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 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 12y agoGoDaddy 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/ http://www.forbes.com/profile/bob-parsons/
- dabent 12y agoI 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 12y agoGoDaddy 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/ http://techcrunch.com/2014/06/09/godaddy-files-for-100m-ipo/ (just a minor correction as I am not the biggest fan of GoDaddy)
- jmathai 12y agoI think the key point here is that it was profitable for the founder :)
- freejack 12y agoIf I understand and remember the finances correctly, debt takes them to about $3b in the hole. Not much of a success story there...
- patio11 12y agoThis is an artifact of a longstanding issue that they've had with GAAP. They sell non-cancelable non-refundable multi-year services (like domain registrations) and receive cash up front for them. GAAP requires that they book that revenue on a pro-rata basis over time. This means that if it costs them $200 to acquire a new customer and that customer immediately whips out their CC and buys $1k of domains spread over ten years then, at the end of the year, they "lost" $100 on that customer and have to console themselves by drying their tears on $800 in cash. It also makes their balance sheet look over leveraged due to the $900 in unearned revenue booked as a liability.
- frankdenbow 12y agoShutterstock: http://www.inc.com/christine-lagorio/bootstrappers-bible-shutterstock-founder-success-story.html http://www.inc.com/christine-lagorio/bootstrappers-bible-shu...
- w1ntermute 12y agoValve 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 12y agoPlenty 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 12y agoWizards 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 12y agoSpanx http://www.forbes.com/global/2012/0326/billionaires-12-feature-united-states-spanx-sara-blakely-american-booty.html http://www.forbes.com/global/2012/0326/billionaires-12-featu...
- beachstartup 12y agohttp://en.wikipedia.org/wiki/SAS_Institute http://en.wikipedia.org/wiki/SAS_Institute
- throwaway5752 12y agoNo idea why you were downvoted... SAS is a pretty good example.
- beachstartup 12y agoAlso, Oracle was completely self-funded/financed for many many years. Or at least that's what the book says.
- tejasm 12y agoInfibeam - www.infibeam.com is an India based ecomm company and was totally bootstrapped. They're worth > $5B
- fred_durst 12y agoI'm not sure if you would call starting in NIH raising money, but how about SAS Institute?
- TallGuyShort 12y agoI 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 12y agoBraintree was bootstrapped until pretty late
- reboog711 12y agoWouldn't LucasFilm count?
- eappleby 12y agoShutterstock 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-shutterstock-founder-success-story.html http://www.inc.com/christine-lagorio/bootstrappers-bible-shu...
- josephpmay 12y agoQuizlet 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 12y agoVirgin 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 12y agoBut 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 12y agoThat'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 12y agoIt 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 12y agoAnother non-technology company, longtime in the making is Arthrex - http://www.businessobserverfl.com/print/ENTREPRENEUR-OF-THE-YEAR-LeeCollier-REINHOLD-SCHMIEDING/ 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 12y agoI don't know if this counts, but Veeva Systems IPOd at north of $4 billion on a grand total of $4m in funding
- tomashertus 12y agoI'm not 100% sure, but I think IKEA was bootstrapped for pretty long time. But I can't find any reference about this:(
- joeyspn 12y agoGitHub is one of the most famous stories about successful bootstrapping [0]... Until $100M in series A, didn't take a penny... (4+ years or so) Here are more cases: http://is.gd/lSgnWB http://is.gd/lSgnWB [0] https://signalvnoise.com/posts/2486-bootstrapped-profitable-proud-github https://signalvnoise.com/posts/2486-bootstrapped-profitable-...
- thirdreplicator 12y agoI 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 12y agoDesire 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.
- jonnathanson 12y agoWalmart 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.
- sayemm 12y agoSam Walton's biography is one of the best business books I've ever read: http://amazon.com/Sam-Walton-Made-In-America/dp/0553562835 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.
- hollerith 12y agoI do not understand. When you write, "earned his stripes," what exactly do you mean?
- johndavidback 12y agoIt's a military reference. Sergeants (I think) have a striped insignia, and it would mean a bump in rank (experience, knowledge, skill). Edit: Not to say he was in the military, it's a metaphor for how Walton gained experience and 'rank' in retail.
- jonnathanson 12y agoIncidentally, he did serve in the military. :)
- sayemm 12y agoThat was his first success as an entrpreneur, selling a Ben Franklin franchise store - http://en.wikipedia.org/wiki/Sam_Walton#The_first_stores http://en.wikipedia.org/wiki/Sam_Walton#The_first_stores
- dlokshin 12y agoEsri is completely bootstrapped, not in a tech hub, and doing north of $1B / year in revs. http://en.wikipedia.org/wiki/Esri http://en.wikipedia.org/wiki/Esri
- slowing13 12y agoI 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.
- aaronbrethorst 12y agoGitHub'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-first-outside-funding-ever/ http://allthingsd.com/20120709/github-valued-at-750m-with-fi...
- macguyver 12y agoChobani is a hugely profitable, capital-intensive billion-dollar company that was 100% bootstrapped. http://hbr.org/2013/10/chobanis-founder-on-growing-a-start-up-without-outside-investors/ http://hbr.org/2013/10/chobanis-founder-on-growing-a-start-u...
- chadkruse 12y agoI 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 12y agoEpic, 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.
- chadkruse 12y agoRaised $70k: http://www.forbes.com/sites/zinamoukheiber/2012/04/18/epic-systems-tough-billionaire/ http://www.forbes.com/sites/zinamoukheiber/2012/04/18/epic-s... Regardless, still a great story.
- mrbrandonking 12y agoThere'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 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 12y agoI 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.)
- xxpor 12y agoThey're still on VB6 and MUMPS. They've just recently started doing C# stuff.
- markolschesky 12y agoEpic, which delivers most of the Electronic Medical Records software for large healthcare organizations in the United States, has never raised any funding.
- MattBnB 12y agoYES! http://businessandbootstrapping.com/8-successful-startup-strategies-from-the-best-bootstrapped-businesses-of-today/ http://businessandbootstrapping.com/8-successful-startup-str...
- bprieto 12y agoZara started as a pop and mom shop.
- stevewilhelm 12y agoSpanx [1] [1] http://www.forbes.com/global/2012/0326/billionaires-12-feature-united-states-spanx-sara-blakely-american-booty.html http://www.forbes.com/global/2012/0326/billionaires-12-featu...
- ajross 12y agoCan't believe no one has mentioned Hewlett-Packard or Apple Computer...
- Mz 12y agoIt 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/about_us/history/timeline/timeline.page http://www.deere.com/wps/dcom/en_US/corporate/our_company/ab...? http://www.deere.com/wps/dcom/en_US/corporate/our_company/investor_relations/why_invest/why_invest.page http://www.deere.com/wps/dcom/en_US/corporate/our_company/in...
- proee 12y agoDigi-Key Corporation. Founded by Ronald Stordahl in 1972. http://en.wikipedia.org/wiki/Digi-Key http://en.wikipedia.org/wiki/Digi-Key
- shanacarp 12y agoYes. Epic Systems was/is purely bootstrapped. Never took a dime of external money.
- markjspivey 12y agoIsn't apple and Microsoft?
- joshu 12y agoI heard that EMC never raised VC
- comatose_kid 12y agoI believe Mu Sigma qualifies.
- 2D 12y agoIn Asia we have quite a few if relying on your family is still bootstrapping.
- mcot2 12y agoBloomberg was bootstrapped.
- macco 12y agoLots auf Germany's hidden champions are bootstrapped after World War II. Most famous example aldi, they own trader joes in the us.
- andrewdubinsky 12y agoDell, Apple, Cisco, Oracle, & Intel. Weren't those all bootstrapped?
- hollerith 12y agoAccording 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 12y agoMulti-millionaire Mike Markkula provided essential business expertise and funding of $250,000 during the incorporation of Apple.
- nuetrino 12y agoMojang could be a future billion-dollar company. I dont think it was ever funded?
- xerophtye 12y agoDoes Facebook count in this? I mean they did start with Eduardo Saverin's $10k as bootstrap money no?
- SofiaBerlin 12y agoHow about ALDI?
- projectramo 12y agoI 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 12y agoActually, 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).
- projectramo 12y agoThat 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 12y agoMicrosoft... 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