Theranos is the telltale story of when VC funding goes awry. The company, which claimed it developed a revolutionary blood-testing technology, raised roughly $724 million from investors. It was valued at $9 billion before it imploded because of a fatal flaw in the company—its product didn’t work. It was all hype, no real value. Even when VC-backed founders aren’t fraudulent, there’s a tendency to prioritize funding and scaling to the detriment of the product.
I founded my company Jotform over 18 years ago. With no outside funding, it’s been a slow climb at times, but today, we have over 25 million users worldwide. I learned a lot about bootstrapping and how it creates the right mix of pressure, thrift, and creativity for developing great, profitable products. Here’s a closer look at why VC funding can cause startups to make bad products.
