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I guess what I meant to say is;

Has there ever been a startup that started small then became successful on its own, instead of having a large financial backup beforehand? If so, may I ask for a list of them?

Thank you!

UPDATE: Thanks to NetTecture, I have found out that angel investors aren't the very sole investors for a business but rather, they often become the startup's mentors in that they would give advice and provide initial financial support to get the startup ready for real investors.

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2 Answers

up vote 3 down vote

7 startups that didn't take investing: GitHub, Red Sweater Software, Panic, Flying Meat, Pixelmator, Hamachi, Cocoatech. Also Microsoft and there really is plenty more.

I have collected more information about the 7 startups above at http://blog.kowalczyk.info/article/uISV-stories.html

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Ok, reality checks:

  • Angel investors do not provide a large budget. They provide a small budget to get something into a state to make a real investment offer and get "real" investors on board. 100.000 to 200.000 USD that an angel typically provides are small change for many business operations - seed money.

  • Sure ther are. 37signals.com. The guy starting Minecraft. I think AngryBirds was also started without external money. Not real "websites" though but businesses based on a gain that use a website as a tool. Starting a website (financed by advertising) - ah, rarely these days. Crowded market and crappy income. Hard to sell to any investor.

As another note - you should have learned in school to properly word your questions. For example, lets asume it is totally impossible to make a successfull web startup without angel investor... the answer would STILL be yes, because, you can be sure with thousands of startups coming up.... there is one guy somewhere that did not have an angel investor and successed or failed (hey, you dont even say successfull startup - and yes, some grow then grow bankrupt, so they are still failures). So, the answer is so badly formulated it only allows yes as an answer.

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I didn't know that angel investors don't provide large budgets. I thought the reason why they're called "angel" is because they pretty much become a business' angel lol. Sorry for making my statement a bit broad. And yeah, I guess you can consider Minecraft as an example of a budget-less startup. I will keep the question open for a few more moments just in case someone posts a hefty list of other startups other than Minecraft and Angrybirds. I wanted to up vote your post but I needed 15 rep for it so yeah. – Propeller Dec 4 '11 at 13:25
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No, they are the angel seeinding an intiitial startup and making them ready for real investor rounds. Financing an initial prototype. If bankrupt Student Joe wants to build a website and has not enough money to buy the domain, pay the hosting and a guy in china for some graphics an Angel steps in. And also tells Joe how to run a business - they often provide the knowledge around operations etc. that many startup wannabe people lack. – NetTecture Dec 4 '11 at 13:33
Wow you're really knowledgable at this. I didn't know about that up until now! – Propeller Dec 4 '11 at 13:35
NExt time maybe type the term into wikipedia first? en.wikipedia.org/wiki/Angel_investor – NetTecture Dec 4 '11 at 13:37
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This Q&A would be more valuable in the future if the question was rewritten to be more specific and to include this new knowledge on angel investors, and if this answer was rewritten to be a little less aggressive. – MikeNereson Dec 4 '11 at 16:12
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