Editor’s Note: Each week Maynard Webb, former CEO of LiveOps and the former COO of eBay, will offer candid, practical, and sometimes surprising advice to entrepreneurs and founders. To submit a question, write to Webb at email@example.com.
Q. We’ve bootstrapped everything since starting this company and have built it entirely by word of mouth. We’re now reasonably big. Do we keep bootstrapping, or do we take significant institutional money? We’ve been scrappy, which has led us to success, so I’m nervous to change our approach.
—Founder thinking about raising $80-$100M
Congrats on this great organic growth. It’s very impressive.
I do think you are looking at this with a bit of a false notion—believing that you can’t be scrappy if you raise money or get bigger. It’s not an “either or.” It’s an “and.” You can grow far beyond where you are today and you can also remain scrappy.
There’s nothing that says you have to lose scrappiness and your thoughtfulness regarding the bottom line. At eBay we were profitable as soon as we opened and we always prided ourselves on that. You can get bigger and still instill the same mindset. Even if you raise a significant amount of money you can still remain cost-conscious.
But with more money there might be more opportunity. At some point if you get big enough, you can no longer stay in stealth. And that means you also have to think about building your impact. This may mean new geographies, new products, a focus on brand, etc.
I think the concern here is a fear of the unknown. But you should not let that paralyze you. Successful companies are not stagnant. They grow. I would argue that what you really should fear isn’t losing what you have but staying the same.
You don’t have to give up your values just because you take money, or because you spend more now in order to get more later. That’s what investing is. If you have an opportunity to go bigger you should consider whether raising money can help you to capture the opportunity faster. Don’t hold your company back.