One of the biggest differences between bootstrapped software companies and their VC-funded peers is their time frames.
Most venture funds have a 7-10 year time horizon. The companies they back need to grow fast and sell in under 10 years to win the game.
That requires 200%+ growth when they are small and 100%+ growth even as they get bigger. And a super-high exit or IPO. Hurry up!
But what if you want to grow your business at a steady 20% a year to stay sane and efficient and keep off of the big-funding drugs?
And then to run your company for 20 years at that rate?
That would be a big disappointment to VCs, but it would create an amazing and valuable company for the founders, their employees, and their customers.
A $1M software company that grows at 20% a year for 20 years becomes a $52M software company.
A steady 25% grower becomes a $141M software company in 20 years.
Why not keep going and growing?
On the Practical Founders Podcast this week I interview Dave Whorton, the CEO and founder of Tugboat Institute.
Dave started Tugboat Institute in 2013 after a 20-year career at the highest levels of Silicon Valley venture capital and tech startups.
Dave has seen firsthand, as I have, that big VC funding doesn’t work well for many tech companies and most non-tech companies.
Now Dave brings together hundreds of what he calls Evergreen® CEOs across industry sectors to share best practices and unique insights and to develop trusted bonds for their respective Evergreen paths.
Evergreen leaders, as he defines them, are seasoned entrepreneurs and CEOs with the vision, creativity, resourcefulness, patience, and grit to build and scale a business that will stay private indefinitely.
It’s a different game with different goals and time horizons, as Dave describes it:
“If you focus on your customers and your employees and do those well, you’re going to build a wonderful company. Profits will follow and you have the patience to allow yourself to grow over time at 10%, 15%, 20% a year, year after year, for 30 years.
“You’re going to be building something really meaningful and you won’t be subservient to anybody else. You’ll only be subservient to your belief and what’s important to deliver those values into your community.
“In most venture-backed companies you’re accountable to one thing and that’s the board of directors—your investors. And if they’re happy, you continue to keep your job. If they’re unhappy, you’re gone.”
Dave has been helping hundreds of successful CEOs and their companies stay off the “Get Big Fast” funding drugs for over 10 years.
It was amazing to hear about Dave’s journey and the foundational principles of building a lasting company that makes a major impact.
Listen to this interview with Dave Whorton on the Practical Founders Podcast.
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