I turned down a $400k seed round. The email I sent and why

An investor I like offered $400k for 12% of Rota in August. I said no. Since people here only ever hear about the rounds that happen, here is one that did not.

Why I said no:

• At $19k MRR growing 6% a month, I do not need the money to survive
• The only thing I would spend it on is two salespeople, and I am not yet sure the second one would pay back
• 12% is forever. The salespeople are an experiment

The email was four sentences. The last one was "ask me again in a year, and I will tell you whether I was wrong."

Unpopular opinion: you should have taken it. Money is cheap when you do not need it and impossible when you do.

That is true and it is exactly why they offered. Cheap for whom, though?

You can hire one salesperson out of cash flow at $19k. If that one pays back in six months, hire the second from the proceeds. You do not need $400k to run a $70k experiment.

12% for $400k values you at $3.3M, about 14.5 times annual revenue. That is a fair offer and you were right to refuse it. Both can be true.

Never took a dollar in twenty-eight years. Not a principle. Nobody offered for the first ten and I didn't need it for the next eighteen.

I took a small round in 2024 and I would again. It bought the 14 months in which I found out the first product was wrong. Not every bootstrapped story has the savings to be wrong for 14 months.

That is the honest counter-case and I am glad it is in the thread. I had four years of salary behind me. Not everybody starts there.