Why aren’t there more $30M or $100M ARR bootstrapped software companies that are still independent? There are far more bootstrapped software companies in the world than VC-funded, so what gives?
You don’t need VC or PE funding to grow a bigger self-funded software company. Something else is going on.
Here are the biggest reasons that there aren’t more $100+ million revenue bootstrapped software companies that are still independent:
1) Most bootstrapped and lightly funded software founders sell their companies before they get to $10M or $20M ARR.
Show me a $20M ARR practical founder and I’ll show you someone who turns down a barrage of $100M+ offers, over and over.
Most founders get tired, frustrated, or bored by they time they build up past $10M ARR, so $50M or more in cash is a life-changing opportunity many can’t refuse.
Or they don’t want to risk one more double-down to grow bigger.
2) Most startup SaaS founders don’t find it fun to be the CEO of a $20M+ business, so they sell the company before then, or their growth slows.
From my experience talking to hundreds of SaaS founders a year, fewer than 20% of successful $5M ARR software founders want to grow past $20M.
It’s a different sport with senior exec teams, 100+ employees, a big payroll nut every month, and all that process stuff.
Some founders love being the CEO of a bigger company, but most don’t. And they have a choice since they own their companies.
3) Most software companies don’t grow up to $20M ARR or $100M ARR, VC-funded or not.
For bootstrapped and lightly funded SaaS:
< 10% of $1M ARR software startups make it to $10M ARR
< 20% of $10M ARR companies make it to $30M ARR (usually with growth equity or private equity help – the partial exit)
That’s 1-2% of these $1M software companies that grow much bigger.
4) Larger bootstrapped software companies don’t show up in the news. We don’t hear about them.
Ever hear of Epic Systems? They are the bootstrapped multi-billion $ EHR software company that runs hospitals in the US.
We don’t hear about them in funding announcements, stock market news, or TV ads. They are winning in their own space.
