Dear VCs: These 4 Companies Are Crushing It and They Don’t Want Your Money. They include a Boston tech company which had revenue of $325M last year and another with sales of $40M.
Mo money, mo problems.
It’s not just Notorious B.I.G.’s posthumous hit track—it’s also the logic behind why some fast-growing Boston tech companies are choosing to forgo chasing after venture capital. For those companies, doing so would simply distract from focusing on building the best product possible—and ultimately, they strive to achieve financial sustainability by way of their customers alone. While the challenges of bootstrapping are many, so are the benefits: Those entrepreneurs maintain complete ownership and control over the vision and the product, free from investors’ influence. That leaves a lot of room to innovate.
Here are a handful of Boston-area tech companies that are either bootstrapped or have raised very little outside funding—and plan to stick with it.
This online video hosting and analytics company has been around for nine years, and has grown to serve 150,000 customers and have a team of 32 employees without raising a penny from VC firms. The only funding Wistia has banked is $1.4 million from individual angel investors. That is, Wistia’s nearly a decade in business has been funded almost entirely by paying customers.
And the company says there are still no plans to raise any institutional money. While they declined to disclose their specific revenue details, Wistia did share that revenue has doubled or nearly doubled each year for the past three years. The company has never aimed for explosive growth, and freemium is a relatively new focus for Wistia—contrary to the path taken by many tech startups, which begin with freemium and hope to gain paying customers over time. “We did it backwards—when we first launched there was no free trial. We only launched a free version of Wistia about two years ago,” Wistia co-founder and CEO Chris Savage said in a recent interview.
CarGurus has the third-highest traffic rate among car-shopping websites despite having no national ad campaigns, and is reportedly considering an IPO this year. In 2014, the company—which was founded by TripAdvisor co-founder Langley Steinert after the company was sold to Expedia—raked in a revenue of $40 million. Meanwhile, the site has launched in Canada, and is working on…