Why We Didn't Take VC Money

In late 2023, we had a conversation with a VC fund that wanted to invest in Miru. They liked the open-source angle. They liked the India-based team with US clients. They liked our growth numbers. They offered us a term sheet.

We said no. It’s the best business decision we’ve ever made.

The Pitch

The pitch was seductive. Take $2M in seed funding. Hire aggressively. Build the sales team. Run ads. Hit $1M ARR in 18 months. Raise a Series A. The playbook is well-documented: grow fast, capture market share, worry about profitability later.

The VC was persuasive. Smart person, good fund, real track record. They weren’t wrong about the market opportunity. Time tracking is a huge, fragmented space dominated by legacy incumbents charging too much. A modern, open-source, affordable alternative has a real shot.

So why say no?

Because taking their money would’ve meant becoming a different company.

What Changes When You Take VC Money

Pricing changes. At $1 per person per month, Miru is accessible to everyone. A VC-backed Miru would need to charge $10-15 per seat to hit revenue targets. I know this because the VC said so, politely, during our conversation. “You’ll want to move upmarket.” Translation: charge more, target enterprises, add the features that justify $15/seat pricing — SSO, SAML, audit logs, compliance certifications. Features that cost real money to build and maintain, features that pull your focus away from making the core product better for everyone.

Priorities change. When you’re bootstrapped, your priority is making customers happy. When you’re VC-backed, your priority is making investors happy. Those overlap sometimes. They diverge more often than you’d think. A VC wants you to grow 3x year over year. Growing 3x might mean spending $500K on a sales team instead of spending $500K on engineering. It might mean chasing enterprise deals instead of making the product better for the freelancer paying $5/month.

Timelines change. VC money comes with a clock. You have 18-24 months of runway, and you’d better have the metrics to raise the next round or you’re dead. That pressure changes how you make decisions. You optimize for short-term metrics — MRR growth, logo count, NRR — instead of long-term product quality. You ship half-baked features to hit quarterly goals. You take on design debt. You accumulate technical debt. You run faster, but in the wrong direction.

Control changes. A board seat means someone else has a say in your company’s direction. Someone who doesn’t use your product, doesn’t talk to your customers, and has a portfolio of 30 other companies competing for their attention. They’ll push for what works across their portfolio, not what works for your specific product and your specific customers.

The Math That Made It Easy

Here’s our situation: Saeloun is a profitable Ruby on Rails consulting company. We’ve been profitable since year one. Our consulting revenue covers all our operating costs — salaries, infrastructure, tools, everything. Miru started as an internal tool we built for ourselves. The development cost was already paid for because we needed the product whether or not it made money.

Every dollar Miru earns is gravy. Pure margin. We don’t need Miru to pay the bills. We need Miru to be a great product that we’re proud of and that grows into a meaningful business over time. There’s no treadmill. No clock. No board meeting where someone asks why growth was only 40% instead of 50%.

We grow at the speed of good product decisions. Some months that’s fast. Some months we focus on paying down technical debt and growth is flat. Both are fine, because nobody’s breathing down our neck.

VC Is a Tool, Not a Strategy

I’m not anti-VC. Venture capital makes sense for businesses that need to spend money before they can make money. Marketplaces, hardware companies, deep tech, anything with massive upfront R&D costs. If you can’t bootstrap, VC might be your only option, and that’s fine.

But for SaaS? Especially developer tools? You can almost always bootstrap if you’re willing to grow slowly. Basecamp has been saying this for twenty years. DHH calls VC “a hell of a drug” because it creates an addiction to growth that distorts every decision you make.

We’d rather be a calm, profitable company that grows 30% a year for the next decade than a rocket ship that burns out in three years. Our customers get stable pricing, a focused product, and a team that’s not going anywhere. We get to build something we’re proud of, at a pace that doesn’t destroy us.

That’s worth more than any term sheet.