Best of Bootstrapping: Bootstrapped Timeslips to Exit

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

In 2018, Co-founder CEO Mitch Russo shared the story of how he built Timeslips and sold it to Sage for $10.5 million in 1994. Very entertaining as well as instructive.

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

Mitch Russo: I was born in New York. I was raised in a small community called Manhattan Beach, Brooklyn. It was there that we basically started a rock band. Using the idea of how to build an entertainment platform as a rock band in high school, I learned a lot about entrepreneurship and I learned a lot about what it takes to make money and how to promote and share content.

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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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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: The Bootstrapping to Exit Path

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

Over the last decade and more, I’ve had the privilege of working with a large number of bootstrapped entrepreneurs. These include self-financed companies and also modestly capitalized startups that operate in a capital-efficient manner applying the principles of bootstrapping. [You can take our free Bootstrapping Course to review these.]

For our Seed Capital series of podcasts and blog interviews, I’ve interviewed hundreds of investors, especially micro-VCs and angels who are playing in the early stage game.

I’ve asked all of them the following questions:

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Best of Bootstrapping: Bootstrapped Using Services to $26M and a Fabulous Exit

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

When we spoke in 2021, Founder CEO Vamsi Kora had bootstrapped Gathi Analytics to over $26 million in revenue in four years and exited at a fabulous multiple. Much to learn from his journey.

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

Vamsi Kora: I’m from south India, from a village in Rajamundry, which is very close to the Bay of Bengal. I did Mechanical Engineering. Right after it, I went to have one of the very few well-paid careers at that time. I couldn’t afford to come to the US. So I went into merchant shipping and roamed around the world for about three years. I made two and half rounds around the equator.

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Best of Bootstrapping: Bootstrapped to Exit and THEN Did a VC-Funded Venture

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

A very effective way to dance the entrepreneurial Waltz is to do a bootstrapped company first, sell it, and then do another venture with a more ambitious agenda. From 2021, Jeremy Swift’s journey as Co-founder and CEO of Cordial is a great case study in this method.

Sramana Mitra: Let’s go to the very beginning of your journey. Where are you from? Where were you born, raised, and in what kind of background?

Jeremy Swift: I was born in Beaverton, Oregon. Most people know about Beaverton because of Nike. It’s a small suburb outside of Portland. I grew up in what I would consider a small middle class family. Both my parents were a rare breed and especially different from the path that I’ve taken in my life. The first job they got out of college is the same job that they retired with 40 plus years later.

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Best of Bootstrapping: Bootstrapped Using Services to $10M and an Exit

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

Among the biases of the Venture Capital industry that need to be categorically ignored, Bootstrapping Using Services happens to be on the top of the list. Zimit Founder and co-CEO James Cramer shares yet another fantastic textbook case study. Zimit was acquired by Workday in September 2021.

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

James Cramer: I was born in Southern California. I grew up in a family that moved around a lot. My dad worked in the automotive industry, and so every few years we would change locations. That put me in Seattle, Southern California, the Carolinas, and then ultimately in Florida.

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Best of Bootstrapping: Bootstrapped with Services, Raised Money, Acquired by Salesforce

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

John Stewart and his co-founder have built MapAnything from Charlotte, North Carolina and Atlanta, Georgia. When we spoke in 2018, he had raised over $40 million in funding, proving that you can build sizable VC-funded SaaS businesses from anywhere. MapAnything was sold to Salesforce in May 2019.

Sramana Mitra: Let’s start at the very beginning of your journey. Where are you from? Where did you grow up? Give us some early story.

John Stewart: I’m from upstate New York. I’m from a middle class background. My mother was a stay-at-home mom. My father was in the construction business. He was an architect. I went to school in New England for Mechanical Engineering at Worcester Polytechnic Institute in western Massachusetts and graduated in 1997.

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