As a Founder, Earning €0 from a Company Sale - Is Bootstrapping Better? – Fabian Schmidt Jakobi, Fanmiles & Boxplot

About this episode

Fabian Schmidt Jakobi has had two very different startup experiences: Despite a successful exit from his first company Fanmiles, he earned €0 from the sale. His second company Boxplot was sold profitably to Hyperscience after just two years – this time without external investors.

From Consumer to B2B: The Fanmiles Story

Fanmiles started as a consumer app and later successfully pivoted to a B2B business model. The company even attracted prominent investors like Philipp Lahm. Despite these seemingly ideal conditions, the founding team walked away empty-handed from the sale – a scenario that's hard to imagine for many founders but occurs more frequently in the startup world than expected.

The reason often lies in the capital structure and dilution effects from multiple funding rounds. Investors typically have liquidation preferences that must be satisfied first during an exit before founders and employees receive anything.

Boxplot: Bootstrapping as an Alternative

Schmidt Jakobi learned from his Fanmiles experience for his next venture. He deliberately built Boxplot without external investors and focused from the start on a sustainable B2B business model. This strategy paid off: the sale to Hyperscience after just two years was significantly more profitable for the founders.

Developing B2B business models follows different rules than consumer products. The focus is on solvable enterprise problems, recurring revenue, and scalable solutions. Schmidt Jakobi could draw on over ten years of entrepreneurial experience.

VC or Bootstrapping: The Deciding Factors

The choice between venture capital and bootstrapping depends on various factors:

Arguments for VC:

• –Rapid scaling in large markets
• –Building network effects
• –Investor expertise and connections
• –Competitive advantages through capital

Arguments for bootstrapping:

• –Complete control over the company
• –All profits stay with the founders
• –Focus on sustainable growth
• –No dilution of shares

Strategic investors can be particularly valuable when they bring market access, expertise, or important partnerships alongside capital. Timing is crucial – too early can lead to excessive dilution, too late might mean missing critical growth capital.

Expert Knowledge vs. Cross-Industry Entrepreneurs

An interesting aspect of the discussion: Can you build successful companies in markets where you weren't originally an expert, like Elon Musk? Schmidt Jakobi's experience shows this is possible, but certain conditions must be met.

Successful cross-industry entrepreneurs often bring fresh perspectives and question established assumptions. At the same time, it's important to quickly acquire the necessary expertise or bring experts onto the team.

Key Learnings for Founders

Schmidt Jakobi's experience yields important insights:

1. –

   Understand capital structure: Before bringing investors on board, founders should calculate the impact on their own shares.

2. –

   Business model focus: B2B models often offer more sustainable paths to wealth building than consumer apps.

3. –

   Consider bootstrapping: Not every startup needs VC money. Sometimes organic growth is the better path.

4. –

   Mind the timing: The right moment for investors or an exit can be decisive.

The story of Fanmiles and Boxplot exemplifies that there are different paths to success – and that sometimes less (investors) means more (for the founders).