30 big companies that started with little to no funding
30 big companies that started with little to no funding
There are many ways to start a new business. You can apply to be part of a fancy incubator, where they’ll help you prove your concept, teach you how to run a company, and give you access to venture capital firms looking to fund up-and-comers. Or you could swing for the VCs and bank lenders on your own, raising cash in rounds until you have enough to get by.
You could also bootstrap. This military-sounding term sounds similar to the phrase “pulling yourself up by your bootstraps” because that’s pretty much what it is. Bootstrapping entrepreneurs start a business on a small budget and take little to no funding, typically doing everything themselves until their business gets off the ground. The success stories become the stuff of legends: The tech titans who started with a little operation in a garage, the chain restaurants that blossom from a tiny loan, or the mega-apps that start as a passion project.
Stacker compiled the amazing stories of 30 big-time companies that started with less than $100,000 and zero or very little outside funding. Read on to see how many of these major names you recognize.
Regular podcast listeners have probably heard ads for MailChimp, a company that makes marketing software for small businesses, and is most famous for its e-newsletter service. The company was founded in 2000 in Atlanta, and built up slowly, with zero outside funding. Today, the company makes $400 million annually.
Another Atlanta business fairytale, shapewear company Spanx was founded by Sara Blakely. When Oprah wanted to include Spanx on an episode of her show in 2000, Blakely had to call in favors to fake a full-time workforce for the camera—while in actuality, her only employee was herself. Today, Blakely is worth $1 billion.
In 1995, Stanford students Larry Page and Sergey Brin worked from their dorm rooms to build a search engine they named Backrub. You probably know it by its current name: Google. It wasn’t until 1998 that someone cut the duo a check for $100,000, which gave birth to Google Inc. It was only enough money for them to move their operations into a small Menlo Park garage, but business eventually boomed, making Google one of the biggest companies in the world.
In 1995, Craig Newmark sent an email to friends inviting them to an event. As he began sending more group emails—about job postings, and so on—people began to ask to be copied on his list. Newmark decided to start a site for all of these classified postings, Craigslist, which eventually became the 20th biggest website in the United States.
Beloved by photographers and adventurists, GoPro was founded Nick Woodman and his wife. They raised the money to start their camera company by selling shell jewelry and belts, along with a small loan from his parents. Since then, the $1 billion company has gone public.
Apple, which has one of the most famous founding stories, was a prime example of bootstrapping. Steve Job and Steve Wozniak used a garage as office space, selling a calculator (in the case of Wozniak) and a car (in the case of Jobs) to fund their operation. This year, Apple became the first public U.S. company to cross into $1 trillion valuation.
Tom Bilyeu started making protein bars in his kitchen with former colleagues. Once they had a viable product, Bilyeu sent 1,000 handwritten letters, along with sample protein bars, to fitness influencers. Today, Quest Nutrition, sells far more than just bars, with a line of protein powders, pasta, chips, and more.
Ironically, the founders of GoFundMe were, well, not funded. Co-founders Brad Damphousse and Andrew Ballester bootstrapped their company, which is now valued at $600 million.
Cards Against Humanity
Eight high-school pals from Chicago created the cult hit game “Cards Against Humanity,” which many call an “R-rated” (or sometimes even “X-rated”) “Apples to Apples.” They gave the game away for free for two years before running a $15,000 crowdfunding campaign on Kickstarter. Now, it’s a wildly popular card game, particularly among millennials, with countless extension packs.
Tough Mudder is known for its difficult military-style obstacle courses, challenging participants with grappling walls, mud pits, and rings of fire. Founder Will Dean is pretty tough, too: He and his co-founder began the company with their last $10,000. He threw his first event when he was 28. Since then, they’ve run more than 400 events, and they’ve still never raised capital.
Called Facebook for web developers, GitHub was founded in 2008 by college dropout Chris Wanstrath along with Tom Preston-Werner and PJ Hyett. They didn’t take any outside funding for four years, surviving on subscriptions from individuals and businesses. This year, Microsoft acquired the company for $7.5 billion.
At age 17, Fred DeLuca took a $1,000 investment from a family friend to open a little sandwich shop in Connecticut. Pete’s Subway, as the place was then known, was supposed to help pay for DeLuca’s schooling, but its runaway success did a lot more than that. Today, Subway has more than 40,000 locations worldwide.
Basecamp began in 1999 as tiny web design firm 37signals. When founder Jason Fried had trouble finding a project management app suitable for his small company, he decided to make his own. The app was released in 2004 and, soon, the profits from paying customers exceeded their web design profits. The company switched its focus, and is now valued at $100 billion.
Hewlett-Packard began in 1934 with two friends doing part-time work out of a rented garage in Palo Alto, California. The two had just $538 of capital, which consisted of cash, plus the value of a used drill press. HP’s first product was a resistance-capacitance audio oscillator, eight of which Disney bought to test movie theater sound systems before showings of “Fantasia.” They moved out of the garage in 1940, went public in 1957, and now have 49,000 employees around the world.
John Paul DeJoria made a friend in Paul Mitchell when the two were working at the same hair care company. In 1980, they took a $700 loan to start John Paul Mitchell Systems. That company was plenty successful, but DeJoria also went on to acquire Patron and co-found the House of Blues chain of performance venues.
This top job-hunting site got started and launched its first product without any outside help. By the time it accepted its first $5 million in funding, “They had bootstrapped the company, launched the service, and were well on their way. They didn't need our money,” as venture capitalist Fred Wilson wrote in a post on his firm’s site. When Indeed was acquired by Recruit Co. Ltd. in 2012, it was worth between $750 million and $1 billion.
Plenty of Fish
Markus Frind, founder of Plenty of Fish, started the dating service as a way to “improve” his resume. Not only did he build the service without any VC funding, but he remained the sole owner of the company until 2015, when he sold it to Match Group, and got to keep the entirety of the $575 million sale.
Peter Rahal and Jared Smith started making protein bars in the basement of Rahal’s childhood home. They sold their first bars door-to-door at local gyms. Lucky for them, that’s a remnant of the past: Last year, Kellogg bought RXBar for $600 million.
Michael Dell was still a 19-year-old freshman at the University of Texas when he began his computer parts company, PC’s Limited. He worked in the dorms with only $1,000 to his name. Dell dropped out of school at the end of the academic year and began growing the company, which would help start the PC revolution and become known simply as Dell, now valued at $57.2 billion.
When Mariano Lopez started Analytica, an IT and management firm, he cut down on all of his expenses. That meant renting out his place, sleeping in a friend’s basement, not relying on a credit card, and not going out with friends. He was the company’s sole employee, doing everything from marketing to accounting. Luckily, his work paid off: Today, the company makes $9.6 million in annual revenue.
Frustrated with the available e-commerce platforms, Tobias Lütke decided to make a better platform himself. Along with his friend Scott Lake, he spent 18 months working on the software. Though they eventually borrowed $200,000 from people they knew and $250,000 from an angel investor, the duo didn’t get paid for nearly two years after that. By 2010, they had become profitable. They raised $7 million in funding in 2010, then $15 million in 2011. Now, Shopify is the go-to e-commerce service.
How do you start a massive online company? If you’re Jon Oringer, you buy an $800 Canon Rebel, take 100,000 images, and slap a bunch of them on a website. That’s how he started Shutterstock in 2003, funding the whole endeavor himself with zero venture capital. Now his site is the go-to place for buying stock footage, and Oringer is a billionaire.
Orville and Heidi Thompson were deep in debt when they began experimenting with candle fragrances in their Crockpot. Their trick? Making a “ceramic warmer” that scents rooms like a candle, but without the need for an open flame. The resulting company was Scentsy, which now has 120,000 consultants selling their products around the world.
This sales and marketing platform didn’t start with much, but it grew quickly. Henry Schuck, co-founder and CEO, was a first-time entrepreneur, bootstrapping to get along until they were making $25 million in annual revenue. Now, DiscoverOrg has been named one of Inc.’s fastest growing companies six times.
Nick Denton started the massively popular blog Gawker from his living room. Eventually, the site split off into a number of different blogs, including Deadspin and Jezebel. Though the site (and Denton) went bankrupt after a lawsuit from Hulk Hogan resulted in a $140 million decision against Gawker, it was purchased by Bryan Goldberg of Bustle and lives on today.
Kevin Plank didn’t have much to his name except $20,000 earned from selling t-shirts at concerts while in college. He racked up $40,000 in credit card debt to fund his sports apparel company Under Armour. A year in, he was broke, but a sale to Georgia Tech turned into interest from the NFL and other big names in the athletic world. Today, the company is worth billions.
Lynda Weinman launched Lynda.com in 1995 as a free resource for people interested in learning web design and other skills. Along with her husband Bruce Heavin, Weinman taught classes and received book royalties, which funded their burgeoning business. Despite some near-failures, she sold the site to LinkedIn in 2015 for $1.5 billion.