INC 5000 2017: How Many Bootstrappers?

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The latest edition of the INC 5000 list came out recently. INC Magazine annually compiles a listing of the companies in the US that:

  • Are private
  • Are “significant” with more than $2 Million in revenue in the most recent year
  • Have grown “fast” over a three year period, from a base of at least $100,000 in the first year.

It’s always inspirational to see companies that have achieve extraordinary levels of revenue growth in a short amount of time. We encourage you to poke around the list to see what kinds of companies are growing rapidly in the US. It is diverse!

The list shows the 5,000 fastest growing companies. In the early years of the list, it was the INC 500 with a smaller showing.

One thing we’ve found of interest over the long term is that number 5,000 on the list – the “slowest growing of the fastest growing” – very consistently shows cumulative 40% growth over a period of 3 years. That is solid, but not out of reach for many companies. Do you aspire to that level of growth?

INC 5000 Sources Of Capital

Of particular interest to us, of course, is what types of capital were used to fund the growth. One of our earliest posts told the story of how a study of the INC 500 several decades ago showed that more than 80% of the INC 500 had not raised outside equity.

What’s the story today? We are launching a research project to find out.

We are using two online references to crosscheck: Crunchbase and Angellist. And we are starting with the top 10 companies.

You can use Crunchbase for free, for at least some basic searches, and not too many of them in one day. If you are on a path to raise angel investment or venture capital, it’s a great resource for finding out who has invested in similar companies, what your competitors have raised, and other useful tidbits.

Angellist is more exclusive. I’m not sure if anyone can join – it really is focused on being a marketplace to connect angel investors and companies seeking angel investment. Since I’m an angel investor, I’ve been a member for a while. So I can see if companies are listed, and see some of the investments made.

Here is the rather unsurprising finding:

50% of the INC 5000 Top 10 Raised Equity

#1 Skillz – a San Francisco based software company has raised $31 million in venture capital.

#3 Gametime – a San Francisco based event ticket marketplace raised $38 million.

#5 Halo Top Creamery – this healthy ice cream company from Los Angeles has three angel investors listed in Angellist, total funding unknown.

#7 automotiveMastermind – a New York software company that has raised $3 million.

#8 Liftoff – based in the heart of Silicon Valley, Palo Alto, this mobile marketing app company has raised $6.8 million from VCs.

What about the rest? We couldn’t find any reference to financing, but their businesses suggest that bootstrapping was probably possible.

#2 EnviroSolar Power – out of Fort Worth Texas, this company is selling installing and managing high ticket alternative energy products made by others.

#4 Club Pilates Franchise – like the name suggests they have developed a franchise for pilates exercise clubs, and raise money by selling franchises.

#6 Small Business Owners of America – this is an investment company out of Columbus Ohio. I don’t like to bring anyone down, but what I saw on their INC 5000 profile and their web site makes me suspicious that they are counting funding of businesses as revenue. And that’s not appropriate.

#9 Greenspire – out of Los Angeles this company also seems to have a business model like #2 EnviroSolar Power.

#10 FormulaFolio Investments – based in Grand Rapids Michigan this investment company is “an algorithm-based money manager and software platform.” The founder and CEO has run his own financial advisor service since 2005, which is a separate company. This looks like a case of bootstrapping a consulting business, identifying a problem, solving it for yourself, then selling it to others.

If this is helpful, please let us know and we will continue down the list!

 

 

 

Don Gooding

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