Bootstrap vs Raise — Founder Value Breakeven
Raising capital trades equity for growth velocity. This tool models founder share across both paths over 3-10 years to find the breakeven point.
20-25% typical for Series A single round
5-10x SaaS; lower for mature businesses
How the Comparison Works
Compound bootstrap growth at your current rate against raised growth after dilution. Winner is whichever path produces more absolute value of your retained share.
1. Bootstrap path
Compound current ARR at your realistic unfunded growth rate. You keep 100% of the smaller outcome.
2. Raised path
Compound at higher growth rate (typically 1.5-2.5x for 2-3 years post-raise). Your share = (1 - dilution) of the larger outcome.
3. Breakeven
Raise wins if growth multiplier exceeds dilution; bootstrap wins if you can grow nearly as fast without capital.
Frequently Asked Questions
Does raising capital always produce more founder value?
No. Raising only wins when the growth multiplier after the raise exceeds dilution taken. If you give up 25% equity for 2x growth, raising wins. If you give up 30% for 1.5x growth, bootstrapping wins.
What growth multiplier should I assume for the raised path?
Raised SaaS typically grows 1.5-2.5x faster than bootstrapped cohort in years 1-3 post-raise. Gap narrows by year 5. Over-optimistic assumptions distort the comparison.
What dilution should I use for a Series A?
20-25% typical for Series A. Seed 15-20%. Multi-round totals: ~40-55% by Series C. Use total dilution to exit, not just current round.
What ARR multiple should I use for exit?
5-10x for SaaS. High-growth (50%+ YoY) and market leaders: 8-15x. Mid-growth: 4-7x. Mature: 2-4x. Multiples compress in cautious markets.
What does this tool not capture?
Salary differential (bootstrappers pay themselves more during the journey), risk profile (raised path has higher variance), strategic optionality, time to wealth.
Can I model multiple rounds in this tool?
Not directly. Use cumulative dilution — if you raise Seed, A, B, C with 15/20/15/10% dilution, input 60% total. Loses some precision but adequate for bootstrap-vs-raise decisions.
Track Ownership Across Funding Rounds
Model your cap table through Seed, A, B, and exit. See your share of future value under different fundraising paths.