founder Bryce Roberts: Profitability is ‘more achievable than a Series A round’

Despite all evidence to the contrary, there’s more to building a startup than raising venture capital.

Founders are finding success without overly relying on VC dollars; some are even sharing profits with their respective employees and customers without the help of traditional funding and Silicon Valley power dynamics.

As some investors slow down their funding pace, it has become clear that profitability trumps funding and venture capital can only take a startup so far when the economy tanks and outside cash streams dry up.

In the portfolio, profitability is its driving force. In fact, its main criterion for funding is that a startup must be on a clear path to profitability with durable fundamentals like high gross margins or the ability to start charging for a product right away, as opposed to companies that need a significant amount of upfront investment for research and development.

Profitability, founder Bryce Roberts tells TechCrunch, needs to be a habit, and founders need to recognize that it’s not a switch they can just turn on. Startups looking to prioritize profitability need to start out as revenue-driven businesses that replace funding milestones with profitability goals.

“Genuinely, it’s not rocket science,” he says. “Profitability isn’t this crazy, elusive thing. It’s literally more achievable than a Series A round. It’s way more achievable than a Series B round. If you look at the kind of fall-off between those rounds, most entrepreneurs would be better off finding their path to profitability and scale.”, which recently announced its latest batch of investments, advises founders to make sure they have what they need to be stable and then to create and measure value, Roberts says. That value, which differs depending on the company, must be quantifiable as some metric or revenue.

To do that, Roberts says founders should adopt a mindset where they’re focused on creating revenue opportunities, rather than cost savings.’s model also does not prioritize hiring ahead of growth, a strategy that seems to be working for its portfolio during the pandemic.

“When I look at the layoffs across our portfolio, they’re relatively small,” he says. “Our companies are probably doing more hiring than firing right now just given that a bunch of them are seeing a lift in this market.”

Roberts is a proponent of raising money on your own terms, not raising for the sake of trying to pivot into a business that investors are willing to fund — and then consequently setting yourself up to need venture capital as a lifeline.

“I think that goes on a lot out there these days,” he says. “We have this notion of what we call permission-less entrepreneurship. If you have to ask people for permission to exist, and the more you rely on those people for yourself to exist, the more risk and exposure you have.”

Still, sometimes startups need funding, which is fine, but there are other options that exist between bank debt and equity financing deals., which doesn’t take any equity upfront, is one such alternative. If a startup in its portfolio raises additional money or sells, converts its investment to equity at a percentage decided on by the company. If the company never sells or never raises another round, gets a share of the company’s revenue until the firm makes 5x its investment.

But isn’t the only alternative in town, and Roberts recognizes that. He says he has begun to offer additional resources to startups looking for other types of funding options. Through its free product, Intro, outlines a number of alternative models.

For example, revenue-based financing lets a company use its existing revenue to finance a loan. According to, this type of financing is good for companies with high gross margins and predictable recurring revenue. Another is e-commerce financing, which can be good for companies with strong customer acquisition channels. explored more of these options in a webinar last week, which you can check out here.

“One of the beliefs we had early on with was like, entrepreneurs are just going to go look for a different product. So many of them have been basically sold the same thing in venture for the last 20 years. And once you’ve been kicked out of your company before, or once you’ve sold your business for $100 million and didn’t make anything, you’re going to start looking for other ways to get supported.”