What bootstrapping actually bought us at LiveRecover

We started LiveRecover in 2018. The product was simple enough to explain at a party: someone abandons their cart on a Shopify store, and a real human being texts them about it. Not a drip sequence. A person, having a conversation, closing a sale.

The SMS category got crowded fast and got funded faster. By 2020 there were companies in our space with tens of millions in the bank. We had none. We were one of very few apps operating at that scale without outside investment.

I've heard the bootstrapping argument made a hundred ways and most of it is about ownership percentages. That's the least interesting part.

The actual advantage#

We were acquirable.

Because we hadn't raised, there was no preference stack, no board with its own timeline, no investor who needed us to be a billion-dollar outcome to make their fund work. When it came time to sell, the conversation could be about whether the deal was good for us. That's a much shorter conversation than the one a funded company has.

The process that ended in the sale started around Q3 of 2020 and closed in the summer of 2021. Almost a year. It would have taken longer with a cap table to herd.

We could say the price out loud. When you've raised money, there's a number below which you're not allowed to sell, and everyone in the room knows it. We didn't have a floor imposed on us by someone else's model. That's a strange kind of freedom and I didn't appreciate it until later.

What it cost#

I don't want to write the bootstrapping romance. It cost us real things.

We moved slower on product than the funded competitors. We lost deals to companies who could afford to do things we couldn't. There were quarters where the right move was obviously to spend money we didn't have, and we just... didn't make that move, and watched someone else make it.

And it made me personally cheap in ways that weren't always smart. When your own money is the only money, you under-hire. I've done that in more than one company.

Where I landed#

I've since raised outside money once — for Vigilance — and I'd do it again in the right situation. The version of this I actually believe is narrower than "bootstrapping is better":

If your business can reach profitability on its own revenue and your realistic outcome is an eight-figure acquisition rather than a category-defining public company, raising money mostly buys you speed and costs you optionality. Speed matters in some markets and not others. In cart recovery apps in 2018, it mattered less than it looked like it did from the outside.

Know which market you're in before you decide which one you're playing.