Company Building

To raise or not to raise — that is the question


In the last seven years of working on Alloy, there is one question that comes up more than most others.

When are you going to raise money?

Or some variation thereof. It’s a valid question. And one that carries significant weight with it. Raising VC money is an important milestone in tech. A milestone celebrated with flashy press releases, waxing LinkedIn posts, and many congratulations all around. Indeed, it can feel like the point of a startup is to raise money.

My appetite for raising money has waxed and waned over the years. In early 2020, I felt an intense need to raise some money to make my venture legit. In 2021, I figured if I joined a startup I’d understand everything I need to know to raise money for my startup (spoiler: this hasn’t happened at least not in the way I initially expected). But come early 2022, I decided that one of the last things I want to do is raise money. This decision has been solidified by many rounds of layoffs and companies closing over the last 18 months.

There are a few reasons for this.


I am scared of the process of raising money. Now, this can be solved quite easily by talking to people about the process. Additionally, a quick Google search reveals many resources that would guide me through the process. But, importantly, I am scared of the rejection from pitching this company to many VCs repeatedly.

Getting rejected by clinicians is a problem that I can design a solution to. They don’t want to buy my product? Fair. Let’s talk about that. Getting rejected by investors is not a problem that I can design a solution to. Getting rejected by investors doesn’t tell me as much about my product or offering as I’d like.

The emotional toll of getting rejected by VC after VC has never appealed to me. I would much rather be rejected by clinicians, healthcare orgs, or a combination of both. Yes the rejection stings, but the next step of building toward something that isn’t rejected is what I’ve fallen in love with.


I don’t want to distract myself by chasing a goal that doesn’t equate to customer interest. Many people say that if you’re going to raise money you need to be 100% focused on that. That focus isn’t quite right for me, yet.

Winning customers means building, designing, and talking. Winning investors means starting the ROI countdown clock. Raising VC money takes the focus from making customers happy to making investors happy. While the former should lead to the latter, I’m not convinced that is best for healthcare. And particularly not for the stage that this product is in.


I am not convinced that the market will tolerate another EMR offering. While clinicians continue to suffer the effects of poor UX, the EMR market is incredibly crowded, making a new product unlikely to succeed. Epic and Oracle own the market that is attractive to growing a VC-backed business (the large hospitals or IDNs) and those organizations won’t be migrating to a new solution any time soon, if ever. The rest of the market has been shrinking, with a surplus of EMR vendors to choose from. These vendors all have many years more experience and expertise in their chosen area of focus.

Breaking into the market is challenging. Only a game-changing solution will be able to disrupt it. And that solution has to make as much financial sense as it does UX sense.

User-centricity is a valid way to make a game-changing solution, particularly in a market where many users lament their tools. However, it is a steep uphill journey to create a solution that can convince the decision-makers to adopt it.

I am not comfortable raising money until I have more indicators that this solution will be at least viable.

Fierce ambition

Ok I added “fierce” because I wanted to continue my lovely F theme. There are two options for funding: bootstrapped or venture-backed. I’d prefer the bootstrapped option.

The likes of Basecamp, doist, iA, MyMind, and others all show that independent, profitable, and sustainable software businesses are possible. Even Epic, the oft-touted boogeyman of the EMR industry, is an independent company (bootstrapped and everything).

This direction is attractive because it shows two things: commitment and sustainability. Building an independent EMR software business means that we are committed to the long haul. Clinicians and healthcare organizations don’t need to worry that we’ll get acquired and dump them or IPO and raise our prices extravagantly to justify a high stock price.

As an example of this dedication, I’d love to have an “Until the End of the Internet” style policy as 37Signals does. I believe it’s important for a new company in this space not to just have a game-changing product but a game-changing approach to support, clinician dedication, and communication.

On the other hand, there are many examples of well-run, successful, and sustainable venture-backed companies doing well. Linear, Buffer, and Figma are venture-backed startups doing well and have found profitability. Further, these companies have a relentless approach to working with customers and users and treating their customer communities with respect.

I think this will have to be a venture-backed company if it were to build a viable product. The costs, expertise required, and team size will require an influx of capital that bootstrapping wouldn’t readily provide. Additionally, the CAC (customer acquisition cost) will be high due to migration, implementation, and training costs.

Final Thoughts

I view money as a tool. It is a tool to use as a means to an end much like Figma, React, and Snowflake are all tools that we use to accomplish a goal. Raising VC money is a quick-ish way to acquire a tool once a company has built confidence in its product.

I will pursue raising venture capital in the future. However, it will be after I have clarity into the product, confidence in the direction, and prospective customers who are excited about using this product.