Best of Bootstrapping: The Buy Side Perspective of Bootstrap to Exit Startups

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page. 

I hope you are following the Bootstrapping to Exit (let’s call it B2E) articles. Last time, I showed you some case studies of larger companies who are acquiring bootstrapped startups.

In this post, I will double-click down on the buy-side psychology of the B2E phenomenon.

There are several factors that play into a relatively larger company acquiring a smaller player.

Financials.

Companies acquire for different reasons. Some acquire to bring in substantial chunks of high growth revenue. Some acquire to bring in adjacent products that their sales force and channel can upsell to existing customers. Some acquire to diversify out of a one-trick pony situation. Sellers need to consider the buyer’s psychology and accordingly steer the conversation.

Valuations vary significantly depending of motivations. Revenue-driven acquisitions tend to be easier to put a price on. Valuations tend to be a multiple of the revenue, regardless of how much money the company has raised.

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622nd 1Mby1M Roundtable for Entrepreneurs Starting NOW: Live Tweeting by @1Mby1M

Today’s 622nd FREE online 1Mby1M Roundtable for Entrepreneurs is starting NOW, on Thursday, October 19, at 8 a.m. PDT/11 a.m. EDT/5 p.m. CEST/8:30 p.m. India IST. CLICK HERE to join. PASSWORD: startup  All are welcome!   

Building an AI Unicorn: Glean CEO Arvind Jain (Part 1)

Arvind is an experienced entrepreneur who was able to raise $15M on a concept to solve a big problem. Since then, Glean has been abundantly funded, generates abundant revenue and has become a legitimate Unicorn.

Sramana Mitra: Let’s start at the very beginning of your journey. Where are you from? Where were you born and raised? What kind of background?

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Best of Bootstrapping: Noteworthy Bootstrapping to Exit Case Studies

If you haven’t already, please study our free Bootstrapping Course and Investor Introductions page. 

I hope you read my article Bootstrapping to Exit. As a follow-up, here are some more case studies from 2019.

From Freshworks Has Acquired Nine Capital Efficient Startups:

All the nine acquisitions by Freshworks have been for undisclosed amounts. Cloud-based video collaboration platform 1CLICK, acquired in 2015, was founded in 2012 and had raised an undisclosed seed round from Blume Ventures and The Chennai Angels in 2014.

Online social discovery platform Frilp, acquired in 2015, was founded in 2012 and had raised $500K in funding from angel investors, including Freshdesk CEO Girish Mathrubootham in August 2014 and an undisclosed venture round with Microsoft Accelerator. It had over 100K users.

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Best of Bootstrapping: Bootstrap First, Raise Money Later Strategy

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page. 

I wrote a book called Billion Dollar Unicorns a few years back. Writing this book took me through the extensive process of talking to entrepreneurs who have built tech companies with valuations above a billion dollars. While there is a tremendous amount of serendipity involved in any extraordinary success story, one recurring theme comes up in these case studies. I am particularly excited to share this nugget because it applies broadly to all classes of entrepreneurial ventures.

Bootstrap first, raise money later.

That’s what Fred Luddy did when he founded ServiceNow back in 2005. Leveraging his domain knowledge and expertise in IT ServiceDesk software, he rapidly acquired 12 customers before raising funding. Initially, he started charging $25 per seat and the 12 customers paid up. He raised $2.5 million in venture capital WITH 12 customers, and ample validation.

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Thursday, October 19 – 622nd 1Mby1M Mentoring Roundtable for Entrepreneurs

Entrepreneurs are invited to the 622nd FREE online 1Mby1M Mentoring Roundtable on Thursday, October 19, 2023, at 8 a.m. PDT/11 a.m. EDT/5 p.m. CEST/8:30 p.m. India IST.

If you are a serious entrepreneur, register to “pitch” and sell your business idea. You’ll receive straightforward feedback, advice on next steps, and answers to any of your questions. Others can register to “attend” to watch, learn, and interact through the online chat.

You can learn more here and REGISTER TO PITCH OR ATTEND HERE. Register and you will receive the recording by email, even if you are unable to attend. Please share with any entrepreneurs in your circle who may be interested. All are welcome!

Cloud Stocks: MongoDB Focuses on Verticalized Offerings

MongoDB (Nasdaq: MDB) recently reported its second-quarter results that blew past all market expectations. The market was pleased with its performance and sent the stock soaring 8% in the after-hours trading session.

Udemy Coupons for Tech Startup Courses – Don’t Miss Out

Our time-tested 1Mby1M methodology for building technology startups has been packaged into short courses on Udemy as a part of our aim to democratize entrepreneurship education at scale globally.

We are offering you up to 85% off of the following Udemy courses this month, spotlighting our most informative and inspirational case studies of noteworthy technology startups.

These coupons will expire on October 31, 2023, so be sure to enroll today!

Bootstrapping:

Bootstrap First, Raise Money Later with Sramana Mitra: TRY1MBY1MOCT2023BTS

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