Continue to bootstrap or VC?

We are currently 3 guys who are working on a tech startup collecting data. We’ve bootstrapped for 2 years now – got monthly revenue of 20k. (growing with factor of 2x per year – just in our small country)

We could serve many more customers if we got more development power to build a platform for our customers – so our bottleneck is, that we can not deliver anymore without a long wait.

We got a lot of support for strategy, sales,… everybody tells us that the poc is successful and we finally have to to finish a product to scale and grow faster – otherwise someone else will do it.

Here is my point:

– Finding a vc will cost me time,  so I won’t be working on the business for some time – (I’m thinking about 3 months – and that’s a lot – I need to travel).

– In our country, I will not find a vc who will do a capital for 2M+ and we think that vc’s are not interested in our country, because it’s too small. (We know our competitors and we also know our usp to them – they are all located in US or Israel – but what we need for succeeding there – is the platform).

– Bank won’t give me 2M so I need to do in small steps, but small steps take time.

So the thing is, hiring 2 more employees and growing like usual … or getting a vc, having more power?

If a vc is joining, does it mean we have to do business in their country?

Have you ever a similar situation, what is your experience?


  • Wait you say you have 20K/mo yet you mentioned you only have a POC (proof of concept ie. prototype). I’m assuming you’re not generating revenue from product but consulting?

    There are regional VC’s every country has their tech press that covers their own startups, figure out who the VC’s are. Most VCs tend to only invest in companies that are within a two hour flight from where they’re based in. So yes, if a VC invests in you, you need to be close to where they are.

    Another option is Angels and Friends and Family and go for a smaller round. Also a lot of emerging countries are trying to bootstrap their startup ecosystem and they give grants (free money) to startups that qualify. Chile, Turkey, Malaysia come to mind. There might be oppty in your country as well.

    • thanks, 20k/mo ( in $ ) does not include consulting – its the service and always includes some customizing – because we want to learn from our customers.

      well poc is understated, im sorry we got here a few marketleaders already… (but as you know, they consume a lot of time)

  • I would hire two more people first to make sure my growth assumptions were correct. If over the next 3-6 months you find that they are, add 2 more people, if it continues, it won’t be too long before you find an investor. Sounds like it would be a rock solid deal for the bank or an investor. To go from $20k month in income/revenue to $2mil in debt/equity loss is saying you can deliver at least 10-15 times as many customers than you currently have. That’s a big jump in a “small country” as you put it. I also believe if you really believe in the jump, you would take the time to find an investor. 😉

  • $20K in a small market does not necessarily translate well into the bigger markets. You might be doing well solely because you’re the biggest fish in a small pond, or are a star in the small local pool of talent.

    Equally, $20K/month for 3 full time guys doesn’t scream 10x-40x of $2M exit in 3 to 5 years.

    Yes, you’ll have to spend time to woo VCs, but from what I’ve seen so far, you’ll have a really hard time getting investment.

    My suggestion is to try and port your product into a big market. If you can show traction there, then you’ll be in much better shape to try for investment. One way would be to try and get into accelerator/incubator programs in the EU or US.

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