Venture vs Bootstrap Models

Josh Hix shares his perspective on venture capital versus bootstrapping, emphasizing that the choice depends heavily on the type of business you want to build and your personal goals. He believes neither path is inherently better, but rather each serves different business models and entrepreneur types.

• Venture Capital is Model-Dependent:

  • Some business models absolutely require venture funding
  • Most businesses don't need venture capital
  • High-fixed cost, low-variable cost businesses (like e-commerce) often need to be very large to break even

• Bootstrap Businesses:

  • Often get unfair negative perception
  • Can create highly content and happy entrepreneurs
  • Generally more valuable than venture businesses on average
  • Better suited for lifestyle-oriented entrepreneurs

• Venture-Backed Business Reality:

  • Very binary outcomes - "$1 billion or nothing"
  • Most venture businesses fail
  • Requires giving up significant control
  • Comes with management overhead (board, investors)
  • Regular fundraising is a "big distraction"

• Personal Choice Factors:

  • Depends on what you want to build
  • Large-scale technology products typically need venture funding
  • No amount of "hustle" can build certain types of businesses without capital
  • Must be comfortable with it no longer being "just your business"

• His Personal Stance:

  • Strongly pro-venture for his specific goals
  • Focuses on large-scale technology products
  • Would raise venture capital again
  • Acknowledges it's not always pleasant but necessary for his chosen path