There was a hidden secret in the rooms of two startup funding events I attended last week in Phoenix.

The richest people in the rooms of both events were the founders who had built and sold valuable software companies without any outside funding.

I have known these people for over 10 years. I saw 10 practical founder friends who are now worth $20m, $35m, $50m, and over $100 million. In the bank.

Many of these bootstrapped founders are the most active angel investors in town.

Ironic, eh?

I knew many VC-funded founders too. Some of the founders at these events are doing fine.

But most of my VC-funded friends in Phoenix don’t get out much these days. They are struggling to hit their growth goals or raise their next rounds. Not fun.

These bootstrapped founders were not on stage or the popular celebrities at these events.

They were the folks that wandered in wearing shorts and big smiles. Standing by themselves until I waved and walked over.

Amazing startup-growth-exit stories with happy endings from each of them.

I used to think big VC funding was the only way to play the software startup success game.

It’s just one way. And there are multiple VC and PE flavors to choose from.

I played the VC-funded software game for almost 30 years. I have won big and lost too. All very exciting.

We just don’t hear about the practical founders who created valuable software companies.

There are many of them. Hidden in plan sight.

They get NDAs instead of press releases when they sell their companies. Hush hush.

And we don’t hear about the VC-funded painful flameouts. No press releases or clapping there.

Pick your poison. It’s hard either way.

The first rule of the startup game is to know which funding-growth game you are playing.

#practicalfounders