If you're already happy at your current level just grow it organically and don't look back.
Remember: happiness is the ability to be content with what you already have, not with what you could do.
I wrote about this years ago, shameless blog post plug:
http://jacquesmattheij.com/three-roads-to-the-top-of-the-mou...
Best of luck, whichever path you decide to take.
Hm. You realize that this may be a bit premature?
You're in the midst of your growth curve, I'd go a bit further before thinking about selling the company, especially if you want to remain 'happy'. Selling a company usually means there will be some strings attached, for instance, you might end up working for the acquiring party for a set period (possibly years...), and you will lose autonomy, which is one surefire way of becoming less happy.
On top of all that you'll have to negotiate a deal (preferably one which does not leave you with a bunch of illiquid stock but with a nice pile of cash), and that too will take a lot of organization and knowledge.
I'd suggest you do everything you can to read up on your situation and what your options are before you commit to any moves.
But that risk always exists, even for funded companies these risks are present. It's an arms race and if your opponent reaches for the nuclear option you have to be very patient and stable if you intend to wait them out and they may even succeed.
Bringing in an investor that would be willing to replace you with a new management team is a Bad Idea(tm). It's also a bad idea to try to mislead your investors and replace yourselves.
Outside money can be great if you want to build a really big business and need the capital to win the market. But there are tons of businesses that are better off using revenue as funding.
One of the drawbacks of the tech media is how few people talk publicly about the businesses where the founders would have been much better off if they'd only avoided funding.
Any specific examples?
You want a life-style business. And that is absolutely fine. Investors want you to be very busy, scale the business and build a large company. Is the only way they can make their money back.
(I work for a venture fund in Dubai)
A non-funded company is not by definition a 'life-style business'. That's pretending there are only two choices whereas in fact there is a huge continuum ranging from mom-and-pop operations all the way to enormous privately held conglomerates.
If you work for a venture fund you should know that the choice is slightly more complicated than funded and life-style businesses.
Being 'happy' does not mean someone wants a 'life-style' business, it simply means they want a healthy work-life balance and that says nothing about the eventual size of the company.
Who doesn't? In the end, everyone is choosing a life-style. Life-style decisions should be the first and most important motivating factor for engaging in any business activity - not money, not growth. Life-style. Money and growth and all the tangible business indicators are at least an order of factor away from the real reason folks do business.
Folks wanting the venture funded path are also choosing that particular life-style: that of a pseudo-employer/boss with expectations and salaried "at-the-coal-face" employees arrangement. If this is what makes them happy, they are in it as much for that particular life-style.
You get what you want. Happily.
The problem with the phrase is that it's become an insult in many corners of the startup world, as if bootstrapping a business on your own to survive decades is not ambitious enough.
The parallel I thought of is getting in shape: becoming a body-builder (by living at the gym and taking steroids) or just be in good shape (by eating healthier and exercising regularly).
What I'm saying is that you should align your "strategy" with your own goals. If you guys are growing organically, are profitable and don't have crazy goals like trying to conquer the world, then welcome to the sane side of the equation! Leave the crazy working hours and unrealistic goals to those with the big egos.. If lots of money and being powerful is what matters to you (I think it should be considered a disease), then go for it as well..
Precisely. Is the startup world so financially uneducated that they see taking venture capital as the only means of raising capital, or worst yet, some sort of duty?
The post practically says the company is awash in money, which would mean there are multiple ways to raise cash. The real question is why are you raising money?
I think you answered it yourself. Investor money is like a debt, and try to avoid it as much as you can.
http://www.aaronkharris.com/investors-and-their-incentives
As few people noticed, The content of the question displays way of thinking that is incompatible with VC.
My approach right now is to find an angel investor who could spend reasonable amount of time with me. Effectively a mentor, to help me with answers for question like yours.
Investors have an insatiable appetite for more money and they tend to push founders to work more even if they are exceeding expectations...
I dislike having investors, as a general rule. They meddle. However, when you take investment it's important to do so intentionally and purposefully.
Good fundraising: "With X thousand dollars we can hire Y developers to build Z feature, which we project to generate a positive net return within N months."
Bad fundraising: "Who-hoo, we're funded! Let's buy some Aeron chairs and kitchen snacks and move to The Mission!"
In your situation: if you have an unfair advantage in a fast-growing market, and you can increase your edge and get more customers/revenue/value with investment quickly enough that the investment pays for itself, then consider it. If the features/hires/investments you could make with that money also fill you with excitement and anticipation, then do it.
If you don't want to be busier and you're happy with what you have, stay far away from investors for both of your sakes. They'll get frustrated by having a "zombie company", you'll get frustrated by their frustration.
Finally, consider pursuing alternative investors. There are many smaller-scale private equity firms (or individuals) which are more comfortable with making investments to generate steady, predictable & consistent cashflow. They might be better aligned with your personal goals.
We are fine in terms of money, I just had this (misguided) idea that getting funding now helps me to be even less involved in the project but since my decisions made this a success I think we really look to sell the whole thing.
Before we do this we will keep growing it for a little longer and try to make everyone replaceable. It doesnt matter much for us anyway. We just want to get done with the making money part of our life and will get there regardless if we sell or not until the end of the year.
So you need to find someone who is interested enough in your unfair advantage that he is willing to be responsible for investment AND operations (AND giving you some money now).
In case your unfair advantage is really that good, have you considered selling the company. Keeping some shares.
I've never heard of anyone successfully using investor money to hire people which replace them. Even so, hiring people is incredibly time consuming, and you will have to manage them.
If you're profitable and your goal is to reach financial independence, in this market I would not raise. If your goal is to make as much money as possible and lose all sense of work life balance, then raising money may be for you.
If your definition means being able to afford some level of living expenses, you're in a different boat.
If you grow more slowly you can avoid most investment, especially VC, you can pay yourself whatever you/the team/the board approves, which will likely be more if you build a great business.
And if you're not coming from a higher-paying job, you should be able to pay yourself over $100k post A, then high $hundreds (to rough market/at least cost of living) and perhaps a little higher, depending on city, stage, health of business.
We decided on the VC path and have been thrilled with it so far. A number of us will be taking permanently lower liquid comp packages for the next 5-7 years but the upside is the equity and fun of building and dominating a stale but important space...
As far as raising money from your users (which I don't recommend, but would unlock what you seem to see as the best of both worlds), I literally got an email about a service I use doing this today. When I got the email I didn't click the "Get shares today" button from the email (which wasn't spam and which I read carefully), but just now I did re-open that email and clicked the button to see where the "get shares now" went, as part of writing this comment.
Where they sent me was: https://www.seedinvest.com and which presumably you can find that coverage easily online (Forbes covered it, they claimed).
Personally, I don't know how I feel about having users invest. Regulation D and the idea of accredited investors had existed for very, very good reason. But there are examples for you to follow. I'm not sure if I can recommend it. It doesn't seem to be a good direction for most companies, and leads to poor outcomes for companies and for users. It also seems very ripe for scams, which a high level of transparency would help you prevent. At any rate it's an option. Personally, I recommend going with the institutional investor.
And, as a vendor witnessing a lot of startups for 14 years, I would also recommend to follow the organic route. You can see a lot of geniuses and killer products crash. Even one nine figure acquisition was not so great for the founders and they didn't get that much after working a few years as part of the retention.
If you want to be acquired in the future, follow the growth route too, since your valuation will be a multiplier of your revenue.
I've decided to not take investment any time soon (if ever)
The very fact that you're having doubts about this says that you really don't want outside investors.
If you're making statements like this:
> We just want to be happy and don't have a more busy life
Outside investment will just make you utterly miserable.
Startup School Talk https://www.youtube.com/watch?v=0CDXJ6bMkMY
