Many people remember 2008 for the financial crisis, but the startup community remembers those years quite differently. Between 2007 and 2009, there was a Cambrian explosion of startups, many emerging from a single startup accelerator—arguably the first modern one of its kind—Y Combinator (YC).
You’ve heard their names. During those years alone, YC nurtured companies like Airbnb, Stripe, Dropbox, and Twitch, among many others. These four alone now boast a combined valuation of over C$250 billion.
Their success stories have become legendary in Silicon Valley, inspiring countless founders to dream of similar trajectories. So much so that, in my observation, the Canadian startup ecosystem continues to strive to replicate the YC model of 2009.
But are we doing more harm than good by following that playbook? As a bootstrapped founder building a technology company in today’s market, I’ve come to believe the answer is a resolute “probably.” This perspective has crystallized as I prepare to speak at an upcoming event about the future of Vancouver’s tech ecosystem in 2025. Reflecting on my own journey and those of my peers has reinforced my conviction that there are multiple paths to building a successful technology company—paths that don’t require chasing venture capital.
The VC Trap
The harm comes when startups are taught to equate success with raising VC money. For many founders, pursuing venture capital doesn’t end up being a stepping stone to achieving their mission. Instead, pitching to investors fundamentally shifts the startup’s focus. Metrics like headcount growth become more attractive—even when they don’t contribute to business viability without VC support.
Our startup community has been chasing the elusive “Silicon Valley of the North” title for years. And things aren’t going to get any easier now that the era of near-zero interest rates is over. According to PitchBook data, while global VC funding peaked in 2021, it has dropped significantly over the past two years.
A New Era of Accessibility
Meanwhile, the costs and barriers to launching a startup have decreased dramatically since 2009. Cloud computing costs have plummeted. The emergence of AI tools and no-code platforms has made technology development more accessible than ever. This democratization of technology means founders can build sustainable businesses with less initial capital.
Yet the prevailing narrative in tech still often equates success with raising massive funding rounds. This mindset overlooks a crucial reality: thousands of startups enter this funding race, but only a tiny fraction make it. Of the few that manage to reach the seed stage, only 2-3% ever achieve unicorn status, according to AngelList.
The pursuit of hypergrowth at all costs has caused many promising companies to crash and burn. It’s as if we’re asking founders to navigate the Sea-to-Sky Highway with scooters strapped to rockets, then celebrating when one out of 10,000 makes the journey.
The Case for Alternative Funding
This is especially true at the earliest stages of building a company. Bootstrap funding and revenue-based financing offer founders the flexibility to grow at a natural pace—finding product-market fit without pouring fuel on a fire that isn’t yet lit. These approaches allow founders to maintain control over their company’s destiny while focusing on long-term sustainability.
To be clear, this is not about dismissing the value of venture capital. It has been instrumental in building some of Vancouver’s most innovative companies, including Trulioo, Clio, and Semios. For certain hard-tech startups, large amounts of funding are critical to commercialize groundbreaking technologies.
But for most ventures, it’s not. Imagine how much more we could achieve as an ecosystem if we embraced a broader range of funding strategies. Ultimately, what I’m advocating for is the freedom to choose a path that makes sense for your business, your market, and your vision—without feeling pressured by the prevailing “VC or bust” mentality.
Building Something Meaningful
At Properate, our journey of steady, sustainable growth has taught me that success can take many forms. We’re building something durable and meaningful, answering to our customers rather than quarterly board meetings. Our growth in revenue and operations has been faster than anything I could have anticipated two years ago. Not because we “must” inflate vanity metrics or release flashy press announcements ahead of a funding round, but because these decisions align with building a business that can last decades.
Broadening the Definition of Success
As our startup ecosystem navigates global economic uncertainty and increased market competition, more early-stage founders need to hear this message. Perhaps it’s time to broaden our definition of startup success.
The next generation of founders should feel empowered to choose the path that best aligns with their vision, values, and market realities. Sometimes, that means saying no to the traditional Silicon Valley playbook and writing your own rules for success.
Arman Mottaghi is the CEO of Properate.
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