In my discussions with SaaS founders struggling to raise Series A or B funding, I have been fascinated by how differently founders respond to their funding challenges.
Based on what I’ve observed, they generally fall into three groups:
1. Survival Mode: these founders are laser-focused on cutting costs wherever possible—trimming everything down to the essentials to keep the business alive.
2. Sitting-It-Out Mode: here, the approach is about slowing the cash burn to extend the runway. The hope is that in 12-24 months, funding conditions will improve, and they’ll be ready to make their move.
3. Strategic Review Mode: this group takes a step back to rethink their entire approach—how they grow, how they fund that growth, and whether they can do things differently.
The third group really stands out. These founders see this challenging period not just as a hurdle but as an opportunity to innovate and build resilience. They’re looking for ways to grow sustainably, without being overly dependent on outside funding. It’s inspiring to see how creative and resourceful they’ve become.
Here are some of the strategies I’ve noticed these founders adopting:
- Running lean, but smart. Bootstrapping is a big theme here. By relying less on external cash, founders can keep control of their companies while building a solid, sustainable foundation. But being frugal doesn’t mean they skimp on investing in what matters—they’re still putting resources into key growth areas while cutting unnecessary expenses.
- Experimenting their way forward. Data-driven decision-making is another common thread. These founders encourage their teams to experiment constantly, testing new ideas, refining processes, and optimizing their customer journeys. Instead of making decisions based on gut instinct, they let real data guide the way.
- Focusing on customers first. Rather than chasing growth at all costs, they’re zeroing in on what really matters: keeping customers happy and loyal. Metrics like Gross Revenue Retention (GRR), Net Revenue Retention (NRR), and Lifetime Value/Customer Acquisition Cost (LTV/CAC) are their north star. These numbers tell them how healthy their revenue is—and where they should focus next.
- Building strong partnerships. Smart founders know they don’t have to go it alone. Instead, they’re building partnerships that give them access to new markets, resources, and opportunities. Whether it’s operational synergies or sales collaborations, these partnerships help them do more with less.
- Driving product-led growth. Product-led growth (PLG) is a hot topic, and for good reason. While it’s not a fit for every SaaS business, many founders are embracing elements of PLG, like user-centric design, virality, and self-service features. Essentially, they’re making their product do a lot of the heavy lifting when it comes to sales, marketing, and customer success.
The goal for these founders is clear: sustainable growth, built on their terms. By stepping off the treadmill of constant fundraising, they can focus all their energy on growing the business. And, as a side effect, this often makes their companies even more attractive to investors or buyers down the road.
Of course, funding will always be an important part of the SaaS world. But what’s often overlooked are the incredible success stories of bootstrapped companies that grow sustainably without relying on constant cash infusions. These businesses don’t just survive—they thrive, delivering amazing outcomes for their customers, employees, and founders.