Zero dilution.Funding without raising capital.

The actual cost of fundraising

Fundraising means selling a piece of your company for cash. For some companies, it is essential — biotech, deeptech, or winner-takes-all markets where speed of execution is the deciding factor.

My situation was different. My companies generated cash quickly enough, the market did not require blitzscaling, and I did not need to hire 50 people in 6 months. I had the option to finance differently, which led me to look closely at what dilution actually costs.

When raising, you sell shares at a price based on today's valuation. If the company is worth 10x in 5 years, those shares were sold at the lowest possible price. At every round — Seed, Series A, Series B — you lose 20-25% each time. Founders of profitable startups often exit with 10-15% of their own company. I had the option to avoid that.

Beyond the financial cost, there is the question of control. An investor wants results, a timeline, an exit. They optimize for their own liquidity event. I wanted to be able to shut down a profitable product because of technical debt (QuickFund), invest heavily in infrastructure before having clients (VMCloud), or reinvest 100% of profits. With a board, each of those decisions would have required negotiation.

There is also the time cost. A fundraise takes 3 to 6 months — pitch decks, meetings, due diligence, legal negotiations. That is 3 to 6 months not spent building the product. I was 20, had 6 projects planned, and had the option of skipping that process.

The cost of dilution in numbers

Concrete example. A €500K seed raise at a €2M valuation means selling 25% of the company.

If the company is worth €20M in 5 years, that 25% is now worth €5M. The founder gave up €5M of value in exchange for €500K — an implicit interest rate of 58% per year. For comparison, a bank loan costs 4-6%.

That is the scenario where the founder keeps control. In Series A, further dilution. In Series B, again. Founders who exit with 10-15% of their company after a €100M exit pocket €10-15M. If they had kept 100%, it would be €100M.

Some companies would never have reached €100M without raising — that is a fact. But the question remains whether the raise was necessary, or whether it was simply the default path.

How I finance the group

The model relies on three sources, in this order. Each has a specific role, a different cost, and specific conditions to access.

Source 1: own revenue. FormaCash generates €971K revenue, QuickFund is profitable, GLT BTC delivers +50% annualized IRR on the portfolio. Every euro of profit is reinvested in the group. No dividends, no bonuses, no unnecessary spending.

Source 2: bank debt. €800K from SEB Pank in Estonia for VMCloud. A loan secured by group assets and projected cash flows. The cost: 4-6% per year, compared to an implicit cost of 58% for an equivalent fundraise.

Source 3: supplier financing. €1.5M in OVHcloud capex. OVHcloud provides the servers, networking, and racks. VMCloud pays over time through a contractual commitment. Zero dilution, zero bank interest.

Bootstrapping in detail

Bootstrapping requires budget discipline: no non-essential spending, a salary of €0 for months so the cash stays in the companies, and strict prioritization.

FormaCash was the first building block. Before the holding, before Estonia, FormaCash was generating cash. That cash is what funded DVP Holding, the first subsidiaries, and the GLT BTC portfolio.

The rule applied: every subsidiary must reach breakeven within 12 months. If it does not, the issue needs to be identified and fixed — not solved by injecting more cash hoping profitability will come.

QuickFund was profitable from month 1. HackBoot reached breakeven in 4 months. VMCloud is the only project that required external financing, because cloud infrastructure demands large upfront capex. That is the role of bank debt and supplier financing.

A side effect of bootstrapping: the budget discipline carries over to the entire organization. When every euro counts, unnecessary expenses are eliminated, hiring is targeted, and fixed costs stay low.

How I got €800K in bank debt at 20

On paper, a 20-year-old applicant requesting €800K from an Estonian bank is not a standard case.

In practice, banks evaluate three criteria: cash flows (repayment capacity), collateral (recoverable assets in case of default), and track record (operational history).

For cash flows, FormaCash was generating nearly €1M in revenue. For collateral, the GLT BTC portfolio of €1M+ served as security. For track record, 2 years of operations with zero payment incidents. The investment program with the cloud provider (€1.5M in hardware) and an existing signed client (HackBoot) also strengthened the application.

The application was assembled by a specialized firm: 5-year VMCloud business plan, audited accounts for all subsidiaries, cash flow projections, collateral breakdown, client pre-commitment contracts. Having an intermediary who structures the file properly made the process easier.

Negotiation took 6 weeks. My age was not an obstacle. In France, the situation would have been different — I was blacklisted from banking, and a French bank likely would not have opened the file. In Estonia, the bank evaluates the structure, cash flows, and collateral. It is the group that borrows, not the individual.

Supplier financing

€1.5M in hardware from a cloud provider — servers, networking, storage, racks across 3 datacenters (Paris, Amsterdam, Frankfurt). Without this mechanism, launching VMCloud would have required either available cash or a fundraise that would have diluted the group by 30%+.

The principle is straightforward: commit to a volume and duration, the supplier provides the equipment, payment is monthly. No explicit interest rate — the cost is built into monthly pricing. It is a lease negotiated directly with the provider.

The provider agreed because I signed a 3-year minimum commitment, VMCloud already had a client (HackBoot) consuming GPU, the business plan showed progressive growth, and securing a €1.5M hardware client was a good deal for them.

Large infrastructure suppliers have dedicated financing programs. They do not advertise them — you have to ask. Most buyers do not.

Point of caution: avoid locking into too long a commitment with a single supplier. I negotiated exit clauses and the ability to add other partners in parallel. Supplier dependency is a real risk.

GLT BTC: collateral and cash management

GLT BTC serves two functions: generating returns (+50% annualized IRR) and acting as collateral for loans. It is a central part of the group's financial structure.

When I applied for the SEB Pank loan, the portfolio stood at €800K+. This strengthened the application — the bank had assurance that even if VMCloud ran into problems, they would recover their funds through the collateral.

The portfolio is diversified across 8 asset classes: stocks (NVIDIA, TotalEnergies, Google, Thales), crypto (Bitcoin, +105% return), bonds, ETFs, indices (S&P 500), commodities (gold), margin account (Amundi, €295K leverage), and cash.

The mechanism: when a subsidiary generates cash, it flows up to the holding and gets invested through GLT BTC. When a subsidiary needs funding for a launch or infrastructure, the holding redistributes. Cash is never idle in a current account.

Next step: using the portfolio as collateral to increase QuickFund's lending capacity. With €1M+ backing it, the loan volume could double.

Mistakes made

The process was not without financing mistakes.

When fundraising makes sense

Fundraising is not always the wrong choice. There are cases where it is the right one.

In a winner-takes-all market where speed of execution is the deciding factor (Uber, Airbnb), raising is rational. When millions in R&D are needed before generating €1 of revenue (biotech, deeptech), bootstrapping is impossible. When hiring 50 people in 6 months is necessary to attack a market, the business does not yet generate that cash.

My case is different. My companies are profitable quickly. The market is not winner-takes-all. I do not need to hire massively. Infrastructure is the only item that demands heavy capex, and bank debt plus supplier financing cover that.

Before raising, it is worth checking whether all less dilutive alternatives have been explored: own revenue, bank debt, supplier financing, public grants, local investment programs. In Estonia there is KredEx, EAS, state-backed loans. Every country has equivalents.

Fundraising is one tool among many. When the business generates cash, when bank debt is accessible, and when supplier financing is negotiable, selling equity is not necessary. The cost of dilution is the highest of all financing methods, and it materializes fully at the time of exit. I chose to keep 100% ownership.

GL