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by jpkeisala 5042 days ago
Can one start a tech company anymore without Venture Capital?
4 comments

Absolutely. Step outside the HN bubble and there are a hell of a lot of people bootstrapping their own ideas and making money from them.
Yes :) . Depending on your definition of tech, of course, there are several bootstrapped companies.

Some examples include Github, Imgur, Carbonmade, 37Signals, Braintree, DuckDuckGo, AppSumo, Atlassian, Envato, etc, etc...

There are also other sources of funding (ex: StartupChile), and that's not even counting angel investors.

I'd exclude Imgur, as last I checked, it wasn't making much money (perhaps even a loss?). Also, Github and DuckDuckGo both took significant venture funding from a16z and USV, respectively. They both grew a substantial userbase (and the former a revenue stream) before taking venture funds, which is a different model for venture funding than is popular today, but they both decided that they needed venture funds in order to realize their ultimate goal.

On a related note, I would consider companies that are bootstrapped by fairly wealthy individuals/angel investors to be a separate class. They're still often backed by former founders of successful startups that had exits (so in some sense, they were able to fund their startup because of previous venture money).

An interesting question is how many companies are founded by individuals with next-to-no capital and take no venture money at any point in their life cycle. It's a different question from the one that GP asked, but it's a far better metric for something we like to pride ourselves on in the tech community: mobility/meritocracy.

We're definitely in a different place than we were in the 90s, when venture money was needed even to get basic server access (today we have plenty of IaaS/PaaS/SaaS companies that reduce the costs). Now, it's possible for someone to create the beginnings of the next Facebook on a student's budget. But that's different from being able to create the next Facebook on a student's budget (ie, without taking any venture money).

I agree that there are still examples even with my stricter critera; they're just less common at the moment.

More than ever. The capital investment necessary to start a "tech company" (admittedly that's a very vague term) has dropped fairly steadily over the past 40 years. Think about it - back then you probably had to actually manufacturer and ship your product, but now thanks to the net and open source you could easily have a product available to end users the same day you think it up. That's not true of all products, but clearly, one of the problems Venture Capital is facing is that you need less and less money to "prove out" an idea than you used to.
What's a tech company? There are certainly examples of small teams or single developers making a living from selling software on the various app stores with no VC funding.