Searching for great examples of self-financed stories are a surprisingly hard challenge. My motivation has always been to discover a new company to learn from their experience.   However, a couple of minutes on the hunt and nothing turns up.   My theories why:

• these companies are private and have no intention of revealing financial status; they may not even care about the distinction
• they want to raise money from venture capital and view self-financing as an transitional state they’d rather not reference
• conventional wisdom that there are few massive successes that are self-financed(not exactly true) or that financing rounds are well-documented, exciting, and easier to feature in the press

 

And yet the statistical smoking gun is out there.  Although we will never know exactly how many businesses were attempted without funding that never went anywhere, it’s safe to say that 99.95% of businesses never get venture funding.  It reminds me of an exchange with a name-brand VC that went roughly like this:

VC:  Our partners reviewed 5,000 proposals last year and seriously considered x%.

Me:  And how many of those proposals did the partners personally know the founder?

VC:  All of them.

It’s not always true, but the point is, it’s more frequent than you might think.  My brief stints fundraising matched this pattern as well – and it makes sense – you’re going to put your money behind an entity you know rather than ones you don’t.  Whether a person knows a VC is not only besides the point, it really doesn’t matter.  What’s important is the feat of having built something creative, and if it was done with fewer resources, it’s all the more impressive.

So now that we know they’re out there, how do we spot them?