>This makes it much easier to get to profitability[0] and never raise again after YC (especially as a SaaS).
More money is better than less money, sure. But a couple founders and a couple engineers making reasonable salaries and 500k gets you, what, 1 year? 1.5? Profitability might still be challenging.
Yeah no one talks about the cost of engineering. Most quality engineers are looking for $150-$200k salary to start. So a team of 5 is easily $1m after benefits, not to mention any equity grants. And that’s before the founders take a salary, before they hire any designers, or marketing, or sales people. The cost of starting a tech company is still low relative to other fields, but it’s increasing drastically.
Yeah I agree to an extent. Founders need to get the business to an MVP and some revenue for B2B SaaS. But if you’re growing at any attractive rate, you’ll outgrow that very quickly. It’s that next step that becomes more difficult when hiring engineers. That’s typically your seed round. For example, let’s say you raise $3m. That’s a nice amount until you realize you need 3-5 engineers that are all an average of $200k/yr fully loaded.
Seems nobody is really investing in that scenario. With modest, to low investment, there should also be very modest returns. By that, I mean taking less to extend runway, but then also have it all pay very nicely on take off.
The founders would need to be able to build the product themselves. It will be challenging, for sure, but I know about a dozen founders that have done it with less.
Not all companies are based out of SF. For companies in India, it easily scales to 10-15 devs. You could get to a 2yr runaway with a small 10 people team.
More money is better than less money, sure. But a couple founders and a couple engineers making reasonable salaries and 500k gets you, what, 1 year? 1.5? Profitability might still be challenging.