Is GitHub Selling Out or Moving Up?

After years of adamantly flying solo, one of the industry’s most prominent and successful bootstrappers just took $100 million from a prominent venture capital firm. Why did GitHub do it, and is the company abandoning its principles or making a smart move for future growth?

Abandoning Bootstrapping

Social coding site GitHub was the poster child for the bootstrapping movement, and it was proud to be fighting the system. One of its founders even passed up $300K and a steady job at Microsoft to start the project. Within a year, the company (which bills its code-sharing platform as “Wikipedia for developers”), had made itself the leader in collaborative development, with a growing staff and a profitable ledger.

After a few early stumbles, GitHub has remained securely in the black and continued to build, so the announcement that GitHub was seeking financing from Andreessen Horowitz came as a bit of a shock. Unlike Yammer, which had a good product but faced a crowded market, GitHub really didn’t need the money to continue its climb. So why would a successful company with no one on its tail take the money now, when everything was already rolling just right?

GitHub’s official blog post put it this way: “Because we want to be better” and “the resources of Andreessen Horowitz can help us do that.”“ That’s a bit vague (“Who doesn’t,” and “Duh,” respectively). In the end, the deal boiled down to “fit,” which GitHub mentioned, and “a whole lot of money,” which it didn’t.

The Fit

Marc Andreessen is not Henry Kravis. He’s as concerned as anyone with turning a profit and justifying valuations. But at heart, he remains an open-source geek who wants to build things. To that end, he’s invested in enterprise technology companies that play in the same sandbox as his own development efforts. It’s easy to see GitHub sitting alongside other Andreessen Horowitz businesses such as