Lots Of Bootstrappers Out There

We heard from lots of gritty entrepreneurs building business the old fashioned way, keeping costs low and funding from revenue. I have done that and know how hard it is to do, so here is a big cheer of recognition for all who are going that route. I hope we can profile some in the future.

When you make it to profitability via bootstrapping, you have a wonderful independence and freedom. You have to keep clients happy every day, but you really do get to call the shots. You don't have a money guy in the boardroom. This is why many people become entrepreneurs.

But what we want to focus on here are VC funded web 2.0 ventures that got to profitability as standalone ventures.

Surely Jigsaw is not the only one?!

We chose Jigsaw to kick off this series because they were VC funded and profitable. (Many people don't like Jigsaw, it seems like a tool for spammers, but that is another story and a bit out of date from what we can see). The point here is, what other Web 2.0 companies have been funded by VC and have reached profitability? Surely there must be some more? Did all the 2003/2004 era Series A funded ventures either exit or fail? Or are some on the cusp of profitability, with enough investor cash to get them there? Even with revenue forecasts that may need to be to brought down as a result of a slowing economy?

Please tell us about any VC funded web 2.0 ventures that are profitable today standalone. Here are the hurdles:

1. "VC Funded". A minimum $3m Series A from a recognized VC fund.
2. "Web 2.0 venture". We will be as loose as possible in this definition. In fact, any web venture funded after 2002 is OK as any venture after that date is likely to have some features of user generated content, social media, SaaS or other 2.0ish characteristics. "Web 2.0" is like the definition of art "I cannot define it, but I know it when I see it and I know what I like".
3. "Profitable". On this criteria we will be tight. We mean the Warren Buffet definition of profitable, which means "free cash flow", otherwise known as "owner earnings". It is really simple and you cannot fake it. You either get more cash from operations (cash from investors does NOT count) than you spend, or you don't. Accounting conventions like EBITDA don't count. More on this later.
4. "Today". That means this quarter. Even better last quarter. Or more than a few quarters.
5. "Standalone". Skype maybe profitable within EBay or YouTube within Google. That is a separate subject. We are looking for standalone ventures that have not exited. They made it to profitability on their own.

Why Free Cash Flow Is The Measure

EBITDA (Earnings Before Interest Taxation Depreciation and Amortization) is an accounting convention that is used a lot in the private equity business. "Private Equity" used to be known as "Leveraged Buyout". The L word is not in vogue today (Ed, using understatement as humor seldom works). Seriously, Private Equity deals have been based on their ability to raise debt at low cost. That game is over for a while.