As a founder that has built a VC backed business to $XXXM in revenue and now as a founder that has built a bootstrapped business to $XM in revenue I guess I'm in a unique position to answer this.
They both have their pros and cons as many people here have said. VCs allow for faster growth, greater risk taking, focus on other things such as culture and team, and sometimes you get tangential benefits such as PR and exposure. However, the downside is dilution, complicated cap table, growth at all costs (including profitability), infighting, differences in opinions and direction, and if you keep going down the VC path, ultimately you might realize you've built a company that doesn't feel like yours anymore. But hey, if you IPO one day at $XB dollars, everyone wins right?
For bootstrapping, the pros are you control your own destiny, work life balance can be great, you get to make all the decisions, you don't have to do anything you don't want to do. The cons are you live and die by your customers, growth can be sloooow, you have to watch every expense, money is always an issue, it's hard to pay employees top dollar.
There are ways to get money without VC, there are many small business loans out there, there's also friends and family which you can also get loans from, it also feels more real to live off of profit - which I think many companies in SV don't know how to do. You can also raise from Angels with non-traditional VC terms such as profit sharing.
As to which I personally prefer, I think there's something great about bootstrapping and living off profits. It's liberating and freeing... but I'd also be lying if I said that VC money doesn't tempt me every now and then. Ultimately I'm lucky in that we're profitable enough to grow at a decent clip without VC dollars so that's the best thing I can ask for... so for me, bootstrapping so far has been pretty great.
Conversely growth is exponential if you maintain margins. So the more you sell the more you have in the bank the more you can invest in growth. Sadly, exponential curves are very flat when you start out.
"There are ways to get money without VC, there are many small business loans out there, there's also friends and family which you can also get loans from,... You can also raise from Angels with non-traditional VC terms such as profit sharing."
For those developing hard technologies, there are also plenty of non-dilutive government grants. SBIRs are a popular funding mechanism that typically start in the $200k-$300k range and can go up to $millions if the technology goals are met. There are also many other government funding mechanisms, especially if your technology is health or defense related. The downside of all these government grants is (1) timing - it usually takes ~>6 months from proposal to $ in bank and (2) inflexible - if your plans change, it is not easy to pivot the use of the $.
They both have their pros and cons as many people here have said. VCs allow for faster growth, greater risk taking, focus on other things such as culture and team, and sometimes you get tangential benefits such as PR and exposure. However, the downside is dilution, complicated cap table, growth at all costs (including profitability), infighting, differences in opinions and direction, and if you keep going down the VC path, ultimately you might realize you've built a company that doesn't feel like yours anymore. But hey, if you IPO one day at $XB dollars, everyone wins right?
For bootstrapping, the pros are you control your own destiny, work life balance can be great, you get to make all the decisions, you don't have to do anything you don't want to do. The cons are you live and die by your customers, growth can be sloooow, you have to watch every expense, money is always an issue, it's hard to pay employees top dollar.
There are ways to get money without VC, there are many small business loans out there, there's also friends and family which you can also get loans from, it also feels more real to live off of profit - which I think many companies in SV don't know how to do. You can also raise from Angels with non-traditional VC terms such as profit sharing.
As to which I personally prefer, I think there's something great about bootstrapping and living off profits. It's liberating and freeing... but I'd also be lying if I said that VC money doesn't tempt me every now and then. Ultimately I'm lucky in that we're profitable enough to grow at a decent clip without VC dollars so that's the best thing I can ask for... so for me, bootstrapping so far has been pretty great.