Raising Anxiety


Where the bootstrapper tells you to raise some capital.

I'm doing a talk at MicroConf Europe in October, where I plan to share all of our behind-the-scenes numbers, as we went from bootstrapping to raising to possibly raising to profitability. Grab your ticket.

In my most voyeuristic indulgence, I have recently been listening to friends talk about bootstrapping / raising external capital for your startup business:

Having trotted both paths (100% bootstrapped and funded with Woo and raising about $500k for Conversio), I wanted to share a few thoughts about this.

Some context about where my opinions originate from:

  • The software and tech world is massively different today. The space in which we built Woo (2007) compared to when Conversio launched (2014) imposed different requirements and "rules". The tools and knowledge are more accessible, but the competition and expectation for high-fidelity V1's is so much higher.
  • In the early days of Woo, I didn't have a family. Conversio first launch a couple of weeks before we welcomed our second-born boy into the world. Being financially responsible for my family has changed my perspective completely.
  • I was lucky to have a good financial exit from Woo in 2013 and I was able to self-fund the first couple of months of Conversio. I did not however have unlimited pockets and it was no fun seeing a decreasing bank account every month.
  • The initial goal for Conversio was to be self-funded and we launched as a paid-only product. Within a week of launch, we changed that though and adopted a freemium approach that delayed revenue.
  • After raising our $500k seed round in early 2015, we explored raising a Series A twice, but didn't like the attached requirements of "having to be a venture-scale business". In November 2015, we made the decision to not follow the default path going through each new Series raise. Instead we prioritised profitability and sustainability, while leaving the door open to raise capital in future (if the terms and our motivation for it made sense).

1. Increased Focused, Decreased Anxiety

The biggest benefit that I got from the seed round was that it reduced my anxiety greatly. I'm always hyper-vigilant about financial security and not knowing for long I would have needed to self-fund Conversio back in the day created a lot of stress.

This meant I was defocused and had a tendency to think more about short-term solutions as a way to release the pressure. While this experience got me to hustle as a fight for survival, I think this was mostly a superficial impetus and motivation. I also don't think it was healthy for me mentally, emotionally or physically.

So in my mind, raising capital created some space within which we could build a real business. It was a good, holistic decision for me and it helped me both be a better founder and leader, as well as a better Adii in the other parts of my life.

2. Raise as Little as Possible (aka "Do Less")

Don't test my on the factual merits of this. Hindsight is 20-20 vision and this is just a gut feel that I'm mostly curious about.

I often wonder how much different (and possibly, better) Conversio would be today if we raised less money. When I started raising capital, I heard and read about how this will require a big time and energy investment (it did) and that there are only marginal differences then in raising $250k vs $500k. So we took some extra money.

But this also created a little bit more comfort than what was probably necessary and I can now see that in our roadmap and journey. We could've built less and kept the product more focused. I could've staggered the growth of the team. All of these things could've theoretically helped revenue growth and accelerated profitability.

If I were to raise capital for a new idea again, I'd figure out how to fund the smallest team with a super-focused product roadmap for long enough to get to profitability. (It goes without saying that revenue on Launch Day is an absolute requirement.)

3. Find Investors that Believe what You Believe

This is a lesson I wish I had learnt sooner. While this could totally be my own, existential, micro-anxiety; I can't deny that it is there and it plays into my thinking and experience often.

I have been treading a fine line with our own shareholders. I feel super-responsible and am totally committed to creating value for each and every one of our shareholders. At the same time, I am not willing to bet the house on a 10X exit, because that is risky and would not serve our family- and life-first culture.

As an alternative, I'm very content to build a growing, profitable business that can return shareholder value through dividends / distributions. I know though that many investors don't invest in risky startups to only get a 10% annual return on their investment.

In future, this is the type of conversation that I would have with every prospective investor before accepting their investment; thus making sure that we are aligned on values on goals and not merely possible business or financial outcomes. While it is possible to tweak this after the fact - as Buffer have done recently (below) - it is much harder to do this retroactively.

Buffer spent $3.3M buying out investors. 

4. Keep Things Tight, Profit is Your North Star

This is Conversio's journey summarised in a chart of revenue & profit:

Green is revenue. Blue is profit. Purple is cash on hand. The second, bolded guideline is $0.

Some of the more significant dates on this journey:

  • September 2014: Hiring my founding team members and building V1, which launched in November 2014.
  • April / May 2015: Closed our seed round.
  • June 2016: Released first paid features. First revenue.
  • November 2015: Decide to prioritise profitability and that we're unlikely to raise more capital in the immediate future.
  • November 2017: Laid off two team members and started a 6 month process of brutally cutting expenditure.

What you should take note of here is:

  • SaaS is hard regardless of your traction. Revenue grows wildly and then sometimes it just plateaus for quite a while with no obvious way to reignite it.
  • Regardless of the amount of cash we had on hand and how much revenue was growing, I was always very cautious about staying close to breakeven every month. Monthly losses were not a problem as we were growing, but I didn't suddenly want to lose $50k in a single month because we were investing aggressively in some experiment. Keeping things tight, saved our bacon.
  • We've had to do hard work in the last 12 months to rectify our cash position and put us in a healthier, safer space.


If you are building software in 2018, I would highly recommend raising some capital at least. It's a tough world out there and you should not have to sacrifice everything about you, your family or your life in service of your ambition to build a business. There are enough smart investors out there that are willing to back good people with good ideas.

Make sure that you have alignment on values and goals with your investors. Have conviction and validation for the idea and business you are building; you are responsible to create value for whoever you bring on board with your journey. If you you can't stomach that responsibility, you / your idea is not worthy of capital today.

And raise capital without falling into the default path of having to raise more money. Give yourself future options to make better decisions on future facts. If you want to profitable, be profitable. If we you want to raise further capital because it serves your business and life, then make that decision. But don't find yourself in a desperate hole where it is a case of "raise or die".