Bootstrapping to a life-changing exit

From leaving a job as an investment banker to being acquired by in under six years

Andy Pai is the CEO and co-founder of Finbox, a financial data platform that covers over 100,000 stocks on 130+ exchanges around the world. Andy co-founded Finbox in 2015 and bootstrapped it all the way to an exit to, a leader in financial data and a Top 200 website globally.

In this episode, he takes us behind the scenes of the entire journey—from leaving his job as an investment banker and moving to San Francisco without a concrete plan to winning an equity-free grant from YC, and eventually getting acquired by

Moving to San Francisco

One of the most common questions that founders get asked by investors is what motivates them to pursue a particular venture. Indeed, being passionate about the problem you are solving can help you bring your vision to life. On the other hand, some people are just passionate about the challenges of building startups. I know Andy personally, and he is one of those people.

At the end of 2014, Andy decided to leave his well-paid job as an investment banker in Chicago to move to San Francisco without any actual plan. He recalls, “I knew I wanted to get into tech but I had no idea what I was going to do. I just felt like I needed to be in San Francisco.”

Upon relocating, Andy rented a house with three of his friends and started working on different startup ideas, not knowing which industry they would pursue. The idea for Finbox came after realizing that they couldn't find an affordable alternative to the investment tools they used in their job as investment bankers.

Starting small and iterating

Finbox is a complex web app that licenses data directly from S&P Global Market Intelligence and covers over 100,000 stocks on 130+ exchanges around the world. Building a whole suite of financial tools like that is not a walk in the park. There is nothing worse than spending months building something, only to realize that no one needs that solution.

To avoid that and validate the need for a solution like Finbox, Andy and his co-founder decided to build interactive valuation models from scratch and put them on a website for anyone to use. Users could adjust growth rates and other inputs and observe the changes to a company's valuation in real time. People loved the interactive financial models so much that Finbox even earned an organic article on Barron's (they didn't pay or pitch any journalists for this).

After recruiting dozens of early adopters and conducting user interviews, it became clear that people needed Finbox. Andy explains, "The first interviews are all over the place. Users are not very good at articulating the problem, and you're not very good at asking them how to explain it. But by the 15th, you can almost predict the next word that's going to come out of their mouth. That is the difference between Finbox and everything else we built. From day one, we knew what problem we had to solve, and we validated our solution with users.”

Work on your business, not in it

There is an old saying that entrepreneurs should work on the business, not in it. This means investing time and energy into thinking about your business from a strategic point of view, instead of being buried by day-to-day tasks. At Finbox, there was a time when the founders were so involved in day-to-day operations that they couldn't focus on the important tasks that would take the company to the next level.

Andy explains, "We were profitable. We had growth, but it wasn't skyrocketing. We had problem-solution fit, but we didn't necessarily have market fit yet. We didn't quite understand how the market wanted to purchase our product. What was really helpful was taking some time away from the business. We then spent a year completely re-engineering the product and partnering with higher-quality data providers. Once we relaunched, there was a night and day difference in the way our growth curve looked.”

This is a testament to the importance of being strategic. If you are too busy working in the business, you might not have enough time to think carefully about how to take it forward.

You don’t need to solve every problem

The most effective way for a founder to have more time to focus on the company's strategy is to hire the right people and delegate day-to-day tasks. For some founders, this can be challenging, especially if they prefer building things over managing them. However, with few exceptions, it is impossible to scale a company if the founders are responsible for everything.

As Andy puts it, "My co-founder and I love solving problems, and we will never back down from a challenge. However, there's a limit to when that's no longer helpful. It's great for getting you off the ground, and you're willing to solve every problem, but at a certain point, there are just people who can do things better than you.”

Alternative sources of funding

Any founder who has gone through the process of raising funds knows how much time it takes away from running the company. That’s why, according to Andy, first-time founders should consider alternatives to venture capital if possible. He explains, "I personally love the idea of building something brick by brick and having some room and flexibility to do that. In terms of bootstrapping versus venture, I think they both have their pros and cons. For first-time founders, maybe it's a bit controversial, but you should have as few distractions as possible between you, your customer, and your product.”

Andy shared his positive experience with the Y Combinator fellowship program, where they received an equity-free grant after completing an 8-week program that provided coaching, mentorship, and connections without the pressure of traditional fundraising. Unfortunately, YC no longer offers equity-free grants.

A shot from the YC interview

In addition to the grant, Finbox also received funding through revenue-based financing from companies such as Stripe and PayPal. For SaaS startups like Finbox, leveraging future revenue to get dilution-free capital is indeed one of the most convenient ways to fundraise.

Did you know? You can raise dilution-free capital via a community round on Wefunder. Raise funds from your customers and fans, pay them back from a % of revenue and mantain control over your company. 🙌

If you have any questions, feel free to reply to this email. We are always happy to help!

Ultimately, as explained by Paul Graham in his essay The Equity Equation, the decision to accept outside investment can come down to a simple equation. The deal is beneficial if what comes with it (capital, added value, etc.) improves the company's average outcome to a point where the remaining percentage of ownership is worth more than the entire company was before.

Getting acquired

As the saying goes, businesses are bought, not sold. While this may not be true for every startup (sometimes an exit must be planned), it was certainly the case for Finbox. Their acquisition was a perfect combination of an expanding market, exponential growth, and the top player in the industry looking to acquire them to make a bet on subscriptions.

Andy recalls, "This was after we relaunched as We were growing really quickly, and everything was firing on all cylinders. The market was just out of control. It was the days of Wall Street Bets, and everyone was interested in finance. We were overwhelmed and around that same time, the CEO of was interested in making a bet on subscriptions."

For Andy, the acquisition wasn't just a means to an end. They had received various acquisition offers before, but never seriously considered them. They had a clear vision of what they wanted to achieve and felt that there was still so much more they could do with the company. They weren't planning an exit and had a glorious product roadmap to work on. However, the acquisition from was not just about the money. It made strategic sense for both companies.

Andy explains, "I had probably spent the last six years thinking about nothing other than the company. If I close my eyes, I can imagine all of the paths that we still hadn't gone down. We had this really glorious product roadmap that we hadn't pursued yet. There were so many things we wanted to do for our customers. It just made a lot of sense to tap into their infrastructure. They had the scale and 100 times more distribution than we did, and that solved a lot of the problems that we were on our path to solving. Strategically, it made a ton of sense for us."

According to Andy, it's really important that interests are aligned because there are so many reasons not to do the deal that can emerge over time. The acquisition process itself took around nine months, and you are constantly being distracted from running the business and focusing on growth.

As Andy puts it, "The actual acquisition process is a different beast altogether. It can be quite emotional. You're essentially partnering with people whom you may not even know very well, and you don't know how everything will work out. There are so many lawyers and accountants involved when all I wanted was to build things. I didn't really care about all that. I cared about user growth. I just wanted to focus on those things.”

Another thing that Andy learned through the process is that everything could fall apart at any moment. That's why he and his co-founder tried to keep the acquisition relatively confidential to avoid distractions and maintain team morale. He explains, "There are so many reasons not to do the deal that get uncovered during the process. It can really be distracting to your team. The morale, the ups and downs, and so for the most part, we didn't share it with a lot of people. We were operating under the assumption that the acquisition might not happen until the money was in the bank accounts. We focused on growth and pursuing our product roadmap, irrespective of the potential acquisition.”