Not all startups have initial funding.
Most businesses begin with a good idea and little money, so it's up to the entrepreneur to decide how to raise startup funding. — piranka/Getty Images

One of the biggest ways the public hears about a new and exciting startup is when that company raises a lot of dough from venture capital firms or from a splashy crowdfunding campaign. But what about those successful startups that didn’t raise money and still found success?

Bootstrapped startups have a long history in the U.S., with many of the biggest companies in the world starting just from one good idea and no initial funding. No doubt there will be more of these companies in the future. Here are five startups from around the U.S. that have never raised institutional venture capital or crowdfunding cash, including some companies you know and some you almost certainly don’t.

BiggerPockets

In 2004, Joshua Dorkin founded BiggerPockets, the largest online community for real estate investing, with no venture capital money. It was a grueling journey for Dorkin and he constantly thought about quitting. But he kept at it and now Denver-based BiggerPockets has more than a million members and a wealth of content including a hugely successful business podcast. Dorkin served as CEO for 14 years and now serves on the company’s board.

Mailchimp

In the realm of email newsletters, Atlanta-based Mailchimp is a giant. There’s a good chance you receive emails from Mailchimp in your inbox every day but don’t know it. But this massive company with nearly $700 million in annual revenue started from a bootstrapped dream. Co-founders Ben Chestnut and Dan Kurzius started the company in 2000 after being laid off from web design jobs. It took until 2007 for them to focus exclusively on MailChimp, but that focus has paid off as it is one of the biggest companies in its space. The company was named Inc.’s Company of the Year in 2017 and today it is still 100% founder-owned.

Bootstrapped startups have a long history in the U.S., with many of the biggest companies in the world starting just from one good idea and no initial funding.

MyClean

Former investment bankers Mike Russell and Mike Scharf started New York-based on-demand cleaning service MyClean in 2009. The two believed that getting home and office cleaning services should be easy to get, so they convinced family and friends to loan them $267,000 — which must have required quite the sales pitch (but is still much better than a term sheet from a venture firm expecting a 10x or 20x return). Russell and Scharf’s big gamble has paid off handsomely, with more than 400,000 home and office cleanings completed since their founding and the company earning more than $9 million in annual revenue. The company has expanded beyond New York to Chicago and Washington, D.C., as well.

SparkFun Electronics

Boulder, Colo.-based SparkFun Electronics, an online retailer for circuit boards, microcontrollers and hobbyist electronics, was founded in 2003 with a simple idea. Founder Nathan Seidle decided to resell hard-to-find circuit boards and gadgets to geeks like him who enjoyed building electronics. The business has grown rapidly over the years, with annual revenue above $30 million and has no signs of slowing down. The company offers hundreds of its own hobbyist electronics and resells thousands of third-party items to help people build whatever they can imagine.

Tough Mudder

When describing the initial idea of Brooklyn-based Tough Mudder to the average person, it probably sounded a little crazy. “Thousands of people will pay good money to run the most grueling obstacle course ever invented, which will include ice baths, extreme hill climbing, and electrical shocks.” But that idea, put forth by Tough Mudder co-founders Will Dean and Guy Livingstone, turned into an incredibly successful company that hosts many of these crazy endurance events each year around the world. Dean and Livingstone each put about $10,000 into the company when it started and if their first race had been a bust, they would have lost it all. Today, more than two million people have run Tough Mudder races, all with no venture capital or crowdfunding.

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Published December 31, 2019