How can a bootstrapped SaaS company raise big funding without raising money from venture capital or private equity investors?
By selling their bootstrapped software company to a big software company that is backed by big funding.
This happens more than you think.
In fact, most strategic sales of bootstrapped software companies are made by bigger software companies that have big VC, PE, or public stock funding.
In the end, these bootstrapped companies “get funded” without raising money directly themselves.
What doesn’t happen very often is one of the founders sticking around to help grow their startup inside the bigger company.
But if you’re committed to the continued growth of your product and your team, you might stick around and learn to play the new big-company sport.
Sam Knight did this after growing BOLT software to over $1M ARR and selling it for a strategic exit to ECI Solutions in 2020, three years ago.
BOLT is a SaaS solution that simplifies project management, scheduling, and estimating for new home construction subcontractors like electricians, painters, plumbers, and more. BOLT helps those subcontractors truly manage their teams such as rescheduling due to unforeseen delays or scheduling out multiple crews simultaneously.
Sam is not leading sales or the product for ECI Bolt Software anymore, but he is playing a key role in growing the business.
He’s also learning a lot about how a software company with 2,000 employees and big PE funding manages operations, culture, and a portfolio of products.
“You have to decide. What do you want to feed, your ego or your family? After you’ve sold your business, it’s not your business anymore. You’re still emotionally attached to it. But you’ve got to be honest, it’s not yours,” Sam tells other SaaS founders.
“The fact is you’ve got to operate as a team and you need to learn the lay of the land in the new company. And you have to rely on the help of other people, You can’t just rely only on yourself or make snap decisions that people had to follow just because you’re the one that said it. “
That’s another way to do it. You can learn a lot about how to scale a software company and work with serious professionals in every department.
Check out my interview with Sam Knight on the Practical Founders Podcast this week at practical founders dot com or use the link in the comments below.
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