Hey!

Chris here. Welcome to Blueprint—the newsletter to help you build a winning engineering team.

I've watched too many founders raise venture capital and completely lose their minds.

They get the money, they celebrate, and then six months later, the company is burning through cash while trying to rediscover what they set out to accomplish in the first place.

It happens over and over again—and it's part of why I'm such a huge proponent of bootstrapping.

I think it's the right choice for 99% of businesses.

Now, there are exceptions. If you're building something so massive that you can't envision doing it any other way—like Sam Altman starting OpenAI—then obviously you need to raise capital.

But that's not my business. And it's almost certainly not yours, either.

So, in the case that you're a "regular" entrepreneur like me, here's why bootstrapping is the far better path.

📒 DEEP DIVE

Why Bootstrapping is the Right Choice for 99% of Founders

I bootstrapped to 100 employees before raising a dollar. Here's why that path works better for almost everyone.

Here's why chasing VC dollars from the start is so dangerous: When you take a large amount of capital before you've really proven things out, people who have never been exposed to a large amount of money get completely drunk on it very quickly.

I've seen people literally lose their minds and start acting like the money is infinite.

They make a bunch of new hires and give big raises to existing employees. Advertising and marketing spend goes way up, too. And then you add the lifestyle creep on top of it: first-class seats on flights, nicer hotels, dinner at more expensive restaurants.

Pretty soon, everyone's scrambling to raise another round of funding because the last one disappeared into thin air.

Doing this in the early days creates dangerous habits.

These habits become nearly impossible to break later. And a business built on this foundation isn't going to stay in business very long.

Why bootstrapping works

Bootstrapping forces a completely different mindset.

It requires you to establish a healthy perspective on how you think about profits from day 1.

As we know, businesses exist to generate a profit. When you bootstrap, this reality is impossible to ignore. You become a more realistic and grounded entrepreneur because you have to be.

When you take capital, you can lie to yourself for a whole lot longer. But you can't do that when you're bootstrapping. That forced honesty makes you better.

There's another advantage that people don't talk about enough: bootstrapping gives you infinite pivots. And it's the infinite pivots that ultimately create all of the opportunity.

When you've raised capital on a specific idea, you're sort of locked in. Investors have given you their money on the premise that you're working on that thesis.

If you want to pivot later, you have to go to the investors and the board and explain why.

When you bootstrap, you can pivot whenever you learn something new. You don't need anyone's permission. That freedom is worth more than you think.

How we did it

Let me give you a concrete example of how this actually works:

I'm the child of a poor Southern Baptist preacher from rural Arkansas, so I had no money. And I certainly didn't know how to raise capital.

So bootstrapping was the natural choice.

In my first business, we bootstrapped for roughly 8 years. We built that company to around 100 employees with no outside money.

Later, when the business was generating profits that proved the validity of our approach—and when we knew additional capital would help us grow—then it was time to raise capital.

But it wasn't until we got to that point that we ever even thought about it.

So when we talk about bootstrapping, I'm not saying you'll run on your own dime forever.

But it makes a whole lot more sense to start that way.

Not every business needs to be a billion-dollar unicorn

Bootstrapping also gives the freedom to find the right size for your business.

It enables and encourages businesses to find the right size. And the older I get, the more I love this idea that not every business needs to be a billion-dollar unicorn.

Many businesses have failed because they tried to scale to a size that didn't make any sense. If they had just stayed at whatever size they were at, they could have generated really solid profits for 20+ years.

For some people, that's not exciting. But there is absolutely nothing wrong with owning a company—no matter what you hear on X and the news—with just a handful of employees generating $500K or $1M a year in net profitability.

So yes, there is a point when it might make sense to raise capital.

But it's equally valid to decide, "You know what? I like it at this size. I don't have anybody telling me what to do. I'm a board of 1, and I can do whatever I want."

Bootstrapping gives you the option to make that choice.

BEFORE YOU GO…

If I could give 1 recommendation to every single person thinking about starting a company, it would be to start bootstrapped.

If you want to raise capital in the future to grow the company, absolutely do that.

But do it once you've hit product-market fit, you're able to generate profits, and you've got really good habits built into the company.

The discipline you build by starting with nothing becomes the foundation for everything that comes after.

Talk soon,

Chris.