That's an interesting point: are there any big tech companies (in the top tier of "big") that didn't take venture capital? I can't think of any offhand.
It'd be an odd result, because there are big companies in other fields that grew by bootstrapping and then reinvesting profits. For example, as far as I can find, Wal-Mart took little to no investment before the IPO. I wonder what makes tech different? Is it somehow more capital-intensive, contrary to the usual assumptions? Or is it that it's a lot easier to get investors in tech, so people aren't forced to bootstrap? Or that alternative financing options are harder to use in tech (no equivalent to Wal-Mart's strategy of opening new stores by taking out loans with existing stores as collateral)?
Some interesting data to see would be: what's the biggest tech company that has never taken outside investment? Are there any significantly bigger than 37 Signals?
VMware. Diane Greene funded it with the proceeds from her (much smaller) startup VXtreme, sold to Microsoft. The first outside capital we took, IIRC, was in 2002 or so, when VMware was already hundreds of employees, profitable, with several products, etc., and it was from Dell and IBM rather than typical VC firms.
Also the industries aren't comparable directly on revenue numbers. Walmart had net sales of $340 million but the net income after tax was $11 million. That's a very low margin business compared to software, where a typical result might be $55 million in revenue to make $11 million.
> are there any big tech companies (in the top tier of "big") that didn't take venture capital?
That's an interesting question. I'd be curious if anyone knows if,when, and how much venture capital companies like Intel, HP, Microsoft, IBM, AT&T, Motorola, and Tektronix took.
I can't tell for sure (Wikipedia has no info, and http://www.fundinguniverse.com/company-histories/Microsoft-C... only talks about their IPO), but it certainly looks like MSFT was bootstrapped when they nailed their big licensing deals. They then IPO'd after 9 years incorporated to get some more cash on hand, presumably.
Microsoft took a mezzanine round a few months before the IPO. The reason usually given is so that they'd have connections to investment bankers to manage the actual IPO, as well as people with a stake in making sure that the IPO price was as high as possible.
I think that the differentiator for tech is that there is a massive skew towards providing free services via the web.
Because many companies work as "media" companies which rely on attracting eyeballs for ads, people get used to not paying for things online which perpetuates the need for VC.
You also don't see very many bootstrapped TV stations.
It'd be an odd result, because there are big companies in other fields that grew by bootstrapping and then reinvesting profits. For example, as far as I can find, Wal-Mart took little to no investment before the IPO. I wonder what makes tech different? Is it somehow more capital-intensive, contrary to the usual assumptions? Or is it that it's a lot easier to get investors in tech, so people aren't forced to bootstrap? Or that alternative financing options are harder to use in tech (no equivalent to Wal-Mart's strategy of opening new stores by taking out loans with existing stores as collateral)?
Some interesting data to see would be: what's the biggest tech company that has never taken outside investment? Are there any significantly bigger than 37 Signals?