Foster: Avoiding fundraising redirects founder energy into product and growth
Wade Foster · 20VC: Scaling Zapier To $140M ARR and a $5Bn Valuation on $1.4M of Funding, What Founders Misunderstand About Fundraising & How Founders Should Think About Secondaries Today with Wade Foster, Founder & CEO @ Zapier · Apr 15, 2021 · at 23:18
Wade Foster, co-founder and CEO of Zapier, explains the advantages of bootstrapping Zapier to $140M ARR instead of continuously raising capital.
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“So many founders spend so much time engaged in the fundraising process. That is a huge mental and time investment that you have to commit to, and so for us, we never had to do any of that. That all Was founder energy poured right back into helping our customers and growing our business.”
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“I tend to say, you know, because we've intentionally put them below the, like, priority list, I don't worry about them all that much. Like, I kind of take the mindset of, like, well, if it was really important, it would have been, like, the number one thing we…”
Foster: Midwestern companies generally lack the ambition found in Silicon Valley
“Having operated inside of Silicon Valley, like We've tried to sort of borrow some of the ambition that you find in companies there. Like, I think you don't necessarily get that in the Midwest.”
Foster: The VC community excels at marketing and selling itself to founders
“This is a thing that I just feel the VC community is just so good at marketing and selling itself that it is really hard to resist that temptation.”
Foster: Founders are not raising money, they are selling company equity
“You are not raising money. You are selling a part of your company. That's what you're doing.”
Foster: Many startups raise large venture war chests without accretive plans
“And I see a lot of companies go out and just, like, taking these war chests and, like, selling all those parts of the company only just to sit on the cash and never do anything with it. Or to go spend it in ways that aren't accretive to the business.”