We Built a $1M+ ARR Startup Without Raising a Dollar - Here’s Why (& How)

"How much have you raised?" is the first question I hear whenever I mention that I run a startup.

With business media glorifying fundraising news, it’s natural for people to assume you’ve raised money if you run a tech company.

Bootstrapping is (almost) seen as a “small business” or “lifestyle business” thing to do. Potential new hires look at it skeptically, as everyone is used to working at funded startups.

If you want to make it big, you must raise… right?

Well, literally 95% of businesses disagree. VC funding is the exception, not the norm. Most companies that make it big don’t raise money.

When people hear that we haven’t raised a single dollar of venture capital at SARAL, I'm usually met with surprise or curiosity. So I want to document the reasons why.

It was a strategic decision not to go that way, and it has paid off. Let’s dive in.

My strategic case for not bootstrapping

Until the early 2020s, not raising money was looked down upon… almost as if you failed to make your business successful. Funded companies were looked at like they were crushing it (even if they didn’t have significant traction).

I worked with funded startups and saw the pros and cons first-hand. Here is why I chose to self-fund my tech company.

Mumbai’s Dhandha Mentality

I grew up in Mumbai, the financial capital of India. The city has a raw entrepreneurial spirit.

It has countless stories of businesses, small, big, and huge, that were started by some guy who came here with nothing and built an empire. The city was built by entrepreneurs without any VC in sight. I grew up being inspired by these guys.

Mumbai makes you dream.

There was always a sense of doing something of your own, or dying on your own sword which appealed to me.

A business has to be profitable. I couldn’t think like the Silicon Valley or Bangalore types, who burn money for years in hopes of someday turning profit. This is the “Dhandha mentality” that helped me create a business with profitability at its core from day one.

A cashflowing agency

A good thing for me was that I was running a marketing agency that was also bootstrapped and profitable.

That meant I had funds to put into the new software business.

A services business is a great place to start your journey. Services are easier to sell than platforms as they deliver a direct outcome instead of a way to achieve a result.

This is also why you can charge a much higher fee for a service. Startup costs for a digital services business are near zero.

I recommend starting a services business to learn the basics of selling, marketing, hiring, and delivery. Plus, you can make some money that you can pour into a more complex business such as SaaS. This is what I did, and it enabled me to start without needing any seed capital.

Equity for the team, not VCs

Everyone says “VCs take a bet on your company.”

But you know who else takes a bet? Your early team.

There’s zero reason for anyone to trust you sub-$500k in revenue. No PMF. No funding. No certainty.

It’s a giant mental leap for someone to leave a stable job and join a scrappy startup that might not exist in 12 months.

For a VC, you’re 1 in 100 bets. For your early team, you’re the bet.

I’d rather give my team meaningful ownership in the company than give chunks of it to investors.

A ruthless focus on customers

As a solo founder, my time is already stretched thin. Raising money is a full-time job for at least 4 out of every 12-18 months.

Nobody tells you that once you raise, you have to keep raising. That is how your early investors make their money back.

People think they can raise once and never look back. Rarely does that ever happen. Your investors will nearly force you to burn more to grow, increase prices unfairly on customers, and eventually raise another few rounds of funding so they can get the exit. It’s almost like a Ponzi scheme. Watch more here:

Not running on the VC treadmill allows me to focus on customers most of the time. Our customers are our investors. They give us money - every month!

Focusing on customers keeps us ahead of the market and makes us win.

Bootstrapping teaches you “real business”

It’s good to play things on hard mode. It makes you a refined operator.

One of my goals is to become a fiercely competent businessman. When you raise money, you’re almost hacking your way to feeling successful.

It is easy to fool yourself.

• You can overpay good hires to make them work with you (without learning how to sell your vision)
• You can acquire customers and “downloads” at a loss (without ever figuring out a business model that works)
• You can get clout and fame for simply raising money (without ever making a business that lasts)
• You can have an office and pool tables with a large team (without learning how to intelligently allocate capital)

When you build a business with your own cash, you have none of these luxuries. It forces you to be a ruthlessly lean operator and cut the BS every step of the way. Life shows you a mirror every day and you need to face it. This is what makes bootstrapped businessmen great.

After a point, you don’t need the money

We’re at $1M+ ARR — enough to pay the team well and reinvest in growth.

We’ve proven the model. We control the pace. We don’t need the money. Every month, I actively turn down multiple VC meeting requests.

We’re in a place where if we ever raise, it’ll be on our terms. We call the shots; no one else does.

Run your business like that. Raise only when you want to, not when you need to.

Some good reasons to raise…

I won’t blindly suggest you bootstrap. It’s what worked for us and many other businesses, but you may be in a unique situation.

Bootstrapping comes with its tradeoffs:

• Growth is usually slower.
• You don’t have good investors to rely on as mentors.
• You can’t “hire forward” until your revenue reaches a certain stage.
• No luxury of runway in the early days. You eat what you kill. Or you don’t eat.
• You have all the financial risk & likely won’t take a salary in the early months or years.

You might want to raise if these tradeoffs don’t make sense to you.

You might not have a cash-flowing business to pull funds from, or you may be building something very complex (like flying satellites into space). In cases like these, it’s very wise to raise money.

Make sure you don’t raise “dumb money” though. Raise “smart money”.

Raise from people who bring more than just money on the table. Seek mentorship, network, and industry connections more than just the capital. Talk to other founders who’ve raised money from them to make sure they’re a good investor.

When should you raise money?

My goal with this blog post was to tell you our story of why we haven’t raised capital and don’t plan to anytime soon.

But sometimes the question becomes not “Should you” but “When should you?”

I’ve seen many young entrepreneurs waste time behind ideas that clearly won’t work because they were able to raise $150k pre-seed money from some no-name VC who took a sector-based bet on them. When you’re young, your time and energy are even more valuable. There is no reason to spend it on subpar low-impact opportunities.

Stop indie-hacking and strive to build something great.

Even if you want to raise money, intentionally play on hard mode for the first 3-6 months. It will drive clarity. Force yourself to get customers scrappily. There are many free ways to get your first 10-100 customers. PAYING CUSTOMERS!

Get real people to pay you money. Validate the model.

Even if you want to raise money, investors would love seeing real traction before trusting you with their capital. With how easy AI has made it to build software, you can do it single-handedly if you wished to.

The best entrepreneurs I studied can build and sell from scratch. They don’t need a safety net. Go test your mettle.

And above all, don’t lie to yourself.

If your idea isn’t attracting paying customers, drop it. Try something else—something boring even—and make it work.

Then raise money.

Winding this up…

Whether or not to raise money should be a strategic decision based on your present situation, the nature of your product, and your goals for the company.

I highly advocate self-funding in the early days. It forces you to build something real, focus on customers, and run a real business. And once you hit traction, you might realize you don’t need VC money at all.

But if you do raise, do it from a position of strength. Not desperation.

Build first. Raise later—if you even need to.