The Hidden Danger of Chasing Venture Capital: Why Bootstrapping Could Be the Smarter Move
Let me tell you a story. Two companies raised massive amounts of venture capital, grew, and spent years chasing that big exit. They worked hard, built their products, and hoped to cash out at the end. But here’s the kicker: both of them ended up selling for less than what they raised.
Let that sink in for a moment.
ACT-ON: Raised $53M, Sold for... $53M?
ACT-ON, one of the early players in the SaaS space, raised $53 million. Seventeen years later, they sold to a SPAC for the exact same amount they raised. The catch? Only 20% of that sale was in cash—the rest was in stock.
After all those years and all that work, ACT-ON ended up with a 2x revenue multiple. Not great, right?
Keap (Formerly Infusionsoft): $100M Raised, Sold for $80M
Now let’s talk about Keap, formerly Infusionsoft. They raised $100 million and spent 23 years building their brand. But in the end, they were acquired for just $80 million, which is under 1x revenue.
You read that right. They raised $100 million and sold for less than that.
Maropost: A Bootstrapped Success Story
Now, let’s look at a different approach: Maropost.
Founded in 2011, Maropost didn’t chase the big venture-backed exit. Instead, they focused on steady growth. In just 5 years, they grew from $0 to $30 million ARR. From 2015 to 2022, they generated $20M+ in EBITDA—straight to the founders, without any VCs taking a chunk of it.
They didn’t have to chase massive exits because they focused on sustainable growth, owning the company, and keeping profits where they belonged—with the founders.
The Real Cost of Chasing VC Money
Here’s the point: It feels amazing to get that big check. The excitement of landing funding, scaling fast, and dreaming of a big exit is hard to resist. But here's the hidden cost—what if that massive exit doesn’t come? What if, after all that time and energy, you end up selling for less than you raised?
Let’s face it, ACT-ON and Keap didn’t win. They worked their tails off, only to sell for less than they raised. That’s a tough pill to swallow.
On the other hand, Maropost focused on sustainable growth. They didn’t aim for a massive exit. They simply built a profitable business, with long-term value and control.
Bootstrapping = True Freedom
The truth is, bootstrapping might be your best bet. No VCs to answer to. No unrealistic pressure to chase huge exits. Just steady, profitable growth that you own. That’s real freedom.
The excitement of raising venture capital is tempting, but what about building a business on your own terms? One that generates profit, allows you to retain control, and doesn’t leave you hoping for a huge payday that never arrives.
So, What’s the Takeaway?
Here’s the bottom line: It’s easy to get caught up in the hype of chasing VC funding. But what no one talks about are the ACT-ON/Keap outcomes. Those founders worked hard, scaled their businesses, and in the end, walked away with nothing.
On the flip side, Maropost showed us that building sustainable growth, with a bootstrapped approach, is a way to win in the long run.
If I could ask those founders of ACT-ON and Keap one thing, it would be: “Wouldn’t you have rather done it like Maropost?”
Here’s the Deal:
Bootstrapping isn’t just about avoiding VC money. It’s about focusing on sustainable growth and keeping your profits where they belong—with you.
💥 Bootstrapping = True freedom and long-term profit.
Want to learn how to build a profitable, sustainable business? Let’s talk about growing your e-commerce store without needing to chase that VC-funded unicorn.
👉 Subscribe now to my Substack → substack.com/@karthickt for actionable tips, proven strategies, and real insights to grow a sustainable e-commerce business.
Stay building.
Karthick T
E-commerce Strategist