The folks at SaaStr asked their LinkedIn audience, “If you had to do it over again, would you raise more or less venture capital?”

42% of respondents answered, “Neither – I would bootstrap my company if I did it again–with no VC funding at all.”

Almost half of the respondents would not raise any VC funding, and only 1 in 5 said they would raise more venture capital next time.

Jason Lemkin and all the folks at SaaStr are very savvy about the B2B SaaS game and have helped build this industry. I follow them and have learned a lot from him and their resources.

But they see the SaaS world through their Silicon Valley eyes, with big VC funding, fast growth, and massive exits as the main game software founders should play.

Their survey responses were probably not just from SaaS founders and it wasn’t a random sample, but their answers are similar to what thousands of founders I know have told me through the years. And my own experience.

Most VC-funded software founders don’t win big in the end–or win anything.

There’s a lot of pain and suffering inside over-funded software companies that don’t meet their growth goals to keep raising more funding.

Layoffs, crazy pivots, leadership changes, and worthless stock options when these hopeful teams get stuck. Ouch.

And it’s also true that big VC funding sometimes works, creating big and valuable companies that change the world and make a lot of people rich. It’s just very, very rare.

50% of VC-funded software founders don’t win any prize at all in the end. Go Big or Go Home is the reality of founders.

If those survey results showed up as negative customer reviews or low NPS scores for anything else, you’d be very concerned before you bought this “product.”

This is the reality of the Power Law in the VC funding game. Most founders don’t get VC funding and most funded founders don’t win any prize.

VC funding isn’t bad, and VCs aren’t evil. We only hear about the amazing potential of their funding only if it works out perfectly.

Most first-time founders don’t understand what VC funding entails, the low odds of success, and alternatives that generally work better for them.

I explain the “Top 10 Things That VCs Don’t Tell SaaS Startup Founders” in the latest two episodes of my Practical Founders Podcast.

Podcast Part 1 – Things VCs Don’t Tell SaaS Startup Founders About VC Funding

Podcast Part 2 – Things VCs Don’t Tell SaaS Startup Founders About VC Funding

These truths aren’t hidden, and they aren’t lies; they just aren’t explained very well to founders considering big funding.

Here are three from my Top 10 List:
5. Your VC investors become your most important customer
6. If you raise Series __ VC funding, you can’t sell your business for $30M or $50M
8. It probably won’t work, but there’s a chance

Most SaaS founders shouldn’t be looking at their companies through the Silicon Valley lens.

The default case for 80%+ of SaaS companies is never to raise VC funding in the first place.