With the emergence of the modern investment capital industry, it seemed as if the idea of ​​establishing a start -up technology company was unwillingly linked to the expectation of institutional financing. But many founders today are a challenge to this assumption.

Bootstrapping – or the use of individual resources to start, grow and expand business – is not new. famous Companies Like Spanx, Craiglist and GOPRO, they all started in the mid -nineties or early first decade of the twentieth century as ideas that were embraced for years before they started and became millions of dollars.

Today, Bootstrapping is witnessing a new wave of attention between the founders, and in the midst of this high interest, a new idea comes: “seeds”.

The concept of “seeds of seeds” has entered a large public discourse as a reaction to the specialization Recession In the investment capital industry in Silicon Valley and outside.

” CNBC. He said that the idea is to raise one round of financing and expanding profitable from there.

After the 2008 financial crisis, the American Federal Reserve was implemented The interest rate policy is zeroThat reduced interest rates in an attempt to stimulate economic growth. This made borrowing cheap funds and motivated investors such as investment capital to publish more money And to the most dangerous assets.

Covid-19 motivation vehicle These effects, VC financing reached their climax during the years of the epidemic. This led to some startups to get huge reviews, while others became exaggerated and eventually went to a bust – thought Wework.

After the epidemic, the pendulum fluctuated in the other direction when investors retreated and the adventure financing began to dehydration. This has prompted some founders to consider alternative options such as Bootstrapping or seed seeds to finance their companies.

But some founders say it comes with competitive advantages.

Wade Foster, co -founder and CEO of Zapier’s multinational software, enjoyed his company seeds before the term “seeds” It was even about. He said that the company began along with its founders participating in 2011, before they raised about $ 1.3 million in the financing of seed stocks in October 2012.

Foster said that after closing their seeds, they managed to work purely from the company’s revenues. By January 2014, the startup became profitable. By 2020, it amounted to $ 100 million of repeated annual revenues.

“I was not aware of anyone [seed-strapping]Foster said at that time, the founders were either in the preliminary camp or in the investment capital camp, and it was not until recent years that this idea was about “one” and “collecting donations.”

Foster and its founders were initially trying to align their company, but they eventually decided to raise a seed tour so that they could grow more quickly.

“We started the company while we were at school, and it’s not as if we had a lot of savings,” he said. “We were Bootstrapping … [but] It is just a slower progress, so the seeds mean that you are able to be full of time and give it everything. “

After obtaining that first round of investments, Foster and its founders decided not to raise money again.

“For us, it is not about the environment, and he had everything related to the fact that we were able to get a profit,” said Foster. “We were three times the revenue throughout the year.”

“More capital could have caused more problems for us, and we didn’t want to get a mitigation, if that was not necessary,” said Foster. “We did not want investors in our kitchen to contact the clips … [we wanted to] Allow ourselves to really be in the driver’s seat where this thing can go. “

Likewise, Payne said he raised only about 750,000 dollars in a seed tour of Stackcommerce in 2011. Sold Trade and content platform for the TPG integrated media company for an unknown amount.

Payne said: “We were essentially profitable when we grew up and stayed profitable after … We ran for about a decade, then we went out to TPG,” Payne said. “All the first investors made 10x their investments … it was a great and successful exit for investors and myself.”

For both founders, the sincerity of the seeds came with privileges supported by investment capital-such as verification of health, social isolation, guidance and resources-but without mitigation and loss of control over the start of operation.

“You get all the benefits of lifting the project without, as you know, its waste,” Payne said.

Another factor that feeds this shift is the spread of artificial intelligence.

“I definitely think that the seeds will be more prevalent for companies,” said Zabir Foster. “I think artificial intelligence, in particular, makes it more possible, as these companies can use automation [and] Technology for a lot of influence without having to rent a group of people. “

“The most expensive thing in technology is to employ people, and this is what” makes it really difficult for startups in the early stage to walk the budget wheel, “Foster said.[AI is] This makes it possible for the founders to make one tour of financing and then get some profitability and growth significantly. “

Today, seeds of seeds and bootStrapping have witnessed a return in the world. While the trend was seen in the American market, those familiar with the industry say it is more clear in Southeast Asia.

“It is more clear here because you can argue that we are in Southeast Asia, we are more suitable for this type of business obtained,” said JX Lye, founder and CEO of ACME Technology.

There are several reasons for that. One of them is that the United States consists of one main market, while Southeast Asia has 11 different countries.

This means that the principle of the “Energy Law” may be applicable on investment capital in the United States, but not for the region. “The power law does not work in Southeast Asia,” Jeremy Tan, co -founder of Tin Men Capital, told CNBC. In the context of the investment capital, the Authority’s Law indicates that although most of the startups in the Fund’s portfolio will fail or fail, a small part of the companies will generate most of the fund’s returns.

“It was circulated in the United States, and it was often a model used in Southeast Asia, although I think it is a model of floping this region,” Tan said. “The VCS who runs this type of models will search for companies that will get huge growth.”

Industry experts say that this type of 100x growth can be very difficult to achieve in Southeast Asia because the region consists of many smaller markets in different languages, cultures and organizational obstacles, unlike the United States, where the market is more homogeneous.

In addition, Southeast Asia suffers Dehydration financing.

The ecosystem of the region in the region is subject to a painful and expensive re-calibration after the financing has reached its climax during the Covid-19s, which puts many startups in the pressure cooker to provide its huge assessments.

Output – Which provides investors as a way to provoke their money and profit for their investments – were also few and far apart in the region, according to the insiders in the industry, which made many owners of investment capital and limited partners more cautious about their bets.

In addition to the current market environment, there was also a shift in the spirit of some founders in the region.

“There is a huge rethink by the founders about whether they want to take [venture capital] He said ACME Technology. “[VC funding] Fire is mainly similar to gasoline … but then you have to rise to the level of this evaluation. “

The founders realize that as soon as they take the money from institutional investors, attention can immediately turn into growth, and sometimes to startup calculation. The mentality of “growth at any cost” can put a lot of pressure on the founders, which may lead to non -sustainable business models and more.

“When a company begins, this is not written.

“I think what most founders realize is what you need not only money, but time. You need time to explore … You need a space. You can’t breathe anyone from your neck [while you’re] “Try to discover your product market in the beginning.”

“It is expected that the founders are expected to work hard, but I think there is a thin line,” said Tan Tan Capital Tan. Why do you work hard for years, just to lose “everything else” like health or family? “There is no use in collecting all this money, and in the end, you realize that you are alone,” he said.