Dear SaaStr: How Hard Is It To Get to $1m ARR Without Investors?
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How Difficult Is It to Reach $1m ARR Without Investors?
My insights are threefold.
First, it hinges on the team.
While most SaaS unicorns have some venture capital backing, there are exceptions like Atlassian ($30b market cap), Qualtrics ($12B), Mailchimp ($12B) who achieved success without it.
The key factor is how lean you can operate, especially beneficial in a slower-evolving market if you are bootstrapping.
Second, bootstrapped SaaS companies typically experience slower growth in the initial stages without external funding to propel them to Initial Traction and Scale.
Atlassian, Qualtrics, and Mailchimp took an additional 3-4 years to reach Initial Traction and Scale compared to some peers.
However, once a SaaS company surpasses $8-$10m in ARR, their growth rates tend to align.
As Ben Chestnut from MailChimp noted, initially no one was interested in funding them, but once they became self-sustaining, the VCs were eager to invest 😉
Therefore, if you can persevere and manage to reach $10m ARR with a lean team, it can be a successful route.
This strategy works best in a less competitive space where taking some extra time for growth is acceptable.
For more insights, check out this related post.
