Hi there - my name is Matt Althauser and I’m a partner/founder at Polychrome. The funding that we brought to the company was $250,000 which we valued as the equivalent of the value of 3 years of development that the existing team had invested into building the initial open source project.
For us (polychrome) at the time, the money came directly from the bank accounts of myself and my two co-founders. It was pretty scary for us all!
In that sense; we do think of ourselves as bootstrapped. We (polychrome) did not (and still have not) take a dollar in compensation for the business. We’ve worked directly on the business for 3 years with the founders. I have been selling the software in Europe and my partner, Greg, in the US/Asia until we got revenue high enough to hire our head of sales, Mike and head of marketing, Anna. While doing this, we (Polychrome) paid ourselves by doing consulting for venture baked companies. Ben (Flagsmith CEO) was being paid by the business and his existing agency.
This is definitely not venture. FWIW - I have built two venture backed companies - Optimizely & Amplitude which took typical venture rounds and would not be bootstrapped IMO.
Thanks for clarifying. Many people (including other commenters) wonder how people manage to transition from open source project to a profitable company. I think the blogpost would have been much better with this extra background information. Normally, when people read stories about bootstrapping they assume the original founder(s) retain all the equity, but in this case Ben had to sell a 50% stake in his business in order to survive.
This is how your partner describes your PE firm in a podcast interview:
> Polychrome is a PE firm focused on acquiring 50% or greater equity positions in B2B software companies. That’s our primary focus and that’s what we do pretty much every day. [...] So we are open to full buyouts, we’re open to partial buyouts. Our core structure though, is typically keeping the founder in place. And we are typically partnering with technical founders who don’t have, the go-to-market expertise or who just don’t want to sell or the go-to-market is what’s keeping the company from taking that next step in their growth trajectory. And so what we’ve done and what our typical structure is we’ll do cash, let’s say for 25% of the business.
When you talk about "typically keeping the founder in place" you're not 50/50 partners. You're the senior partner.
Wow that's impressive! Though I always thought bootstrapped was more that the product pays for itself from an early phase, not that you use debt/investment to fund a big make or break effort that's going to need a show lot of revenue fast.
I've now worked at 3 different companies that built feature flags both internally and as a core part of their external product offering. I'm currently at Flagsmith (open source too).
Here are some of the more popular front-end feature flag use cases:
1. Gradual Roll Out: Build a feature and release it to 5% of your users, then increase as you see that it isn't "breaking anything". You might even do this AFTER a successful A/B Test concludes.
2. Test in Production: Build a feature and release it to only your internal team (or QA Team) to see how it works in a real production setting.
3. Feature Gating: Managing access to specific features based on a targeting condition. I've seen people do this for BETA features with key customers pretty often.
Most common reason people don't use them:
1. They are concerned about feature flag creep. Managing them if they aren't deprecated can be a problem worth thinking through ahead of time.
2. They worry about giving access to important parts of their product in production. Thinking about your environment set-up and access control is smart.
For us (polychrome) at the time, the money came directly from the bank accounts of myself and my two co-founders. It was pretty scary for us all!
In that sense; we do think of ourselves as bootstrapped. We (polychrome) did not (and still have not) take a dollar in compensation for the business. We’ve worked directly on the business for 3 years with the founders. I have been selling the software in Europe and my partner, Greg, in the US/Asia until we got revenue high enough to hire our head of sales, Mike and head of marketing, Anna. While doing this, we (Polychrome) paid ourselves by doing consulting for venture baked companies. Ben (Flagsmith CEO) was being paid by the business and his existing agency.
This is definitely not venture. FWIW - I have built two venture backed companies - Optimizely & Amplitude which took typical venture rounds and would not be bootstrapped IMO.