“So the most important question for me is when is the right time to raise money for a bootstrapped startup?”

The answer to that is pretty straight forward but is a little boring: Raise money when you absolutely need to, not because it will make you feel successful. That’s a common trap.

There are a whole set of scenarios (I won’t be exhaustive):

• You can tell you’re going to run out of money in the next 6–12 months
• You wish you could spend more money (e.g. hiring people) to grow for the long-run
• You are deeply concerned about the economy and might not have the runway in the future to survive if things went south
• You feel like you’re making a lot of short-term decisions because you’re a little desperate to earn cash. (e.g. you’re less flexible with customers, you build features that you hear people will pay for in the short-run)

You generally shouldn’t be raising money until your company has reached some kind of milestone though. For example, if your product hasn’t obviously reached product market fit, don’t do it — be a cockroach and survive. Or you’ve been able to repeatedly sell your product to 50–100 customers in a pretty similar way and you think it’s time to hire professional, full-time person to do it because you can’t get to other things.

Generally though, when you’re bootstrapped, you should raise money when you genuinely feel like hiring someone will make a pretty big difference. Most companies can’t hire people without having raised funds — there are exceptions, of course. It’s important to really internalize that hiring people comes with a lot of responsibility (if things don’t work out, you’ll have to let them go and it’s pretty painful — I’ve done it and it’s like breaking up with your girlfriend) too and you want to be objective about whether it’s the right time.