Shahar Goldboim
February 14, 2025
Every founder hopes that their business will become the next unicorn. Who hasn’t dreamed of making headlines with a massive funding round or a record-breaking exit? But in the race to grow, not all capital is created equal—and the wrong investors can cost you control, flexibility, and even the future of your business.
While millions from venture capital or private equity might sound appealing, we’ve all heard the horror stories—investors forcing layoffs, consultants making bad calls, and growth-at-all-costs strategies that crush innovation.
So, how do you scale your STR business without losing control? Let’s break it down.
1️⃣ Bootstrapping: The Power of Staying Lean
If you’re starting in STR, you’ll likely need to bootstrap. Investors still say, “Oh, so you’re like Airbnb?” which means early funding can be hard to find. But bootstrapping has advantages:
✅ Full control – You make the calls, pivot as needed, and grow at your own pace. ✅ Flexibility to experiment – No pressure from investors demanding short-term wins. ✅ Every dollar is yours – Profits go back into scaling, not into investor pockets.
🚨 The challenge? Growth is slower, and cash flow is tight. But if you scale profitably at this stage, you’ll have more leverage when raising money later.
2️⃣ Angel Investors & SAFEs: Smart Money Without the Valuation Battle
Once you prove your concept, angel investors can bring cash, connections, and expertise—without the headaches of big VC firms.
The best way? SAFE (Simple Agreement for Future Equity) deals.
💡 How SAFEs Work:
- Valuation Cap – Protects early investors by ensuring they get more shares if your valuation skyrockets.
- Discount Rate – Gives early investors a % discount on your next round’s valuation.
🚀 Why It’s Powerful? ✔️ Lets strategic partners invest early without arguing over valuation. ✔️ Flexible funding—gives you capital while keeping future options open. ✔️ Great for STR industry investors who know the business and can help you grow.
3️⃣ Crowdfunding: Let Your Customers Invest
If you have a strong STR brand, crowdfunding can turn loyal customers into investors—and your biggest brand ambassadors.
✅ Smaller investors, less pressure than VC. ✅ Creates a loyal fan base—people who fund you will promote you. ✅ Proven success—companies like Jurny have used it to scale.
🚨 The challenge? Crowdfunding is NOT free money. You need a strong pitch, clear updates, and actual results.
4️⃣ VC Funding: The Fuel That Can Make or Break You
Venture capital (VC) is the rocket fuel for STR startups—but only if you do it right.
🚀 VCs want fast growth, not fast returns. They bet on scaling companies at insane speeds so they can cash out at a massive valuation.
How to Raise VC the Right Way:
🔍 Find the right VCs – Not all VCs are the same.
- If they invest in biotech, don’t pitch them your STR startup.
- If they write $50M checks, they won’t fund your $5M round.
- Look for VCs that invest in STR, proptech, or travel startups at your stage.
📊 Have a killer pitch deck – Your deck should scream “billion-dollar company in the making” with: ✔️ A massive TAM (Total Addressable Market) – Show the industry potential. ✔️ A scalable model – How will you 10x in a few years? ✔️ A competitive edge – Why are you better than the alternatives? ✔️ A smart use of funds – If you raise $10M, how will you deploy it?
🔥 The mistake many founders make? ❌ Spending valuable time pitching investors who aren’t the right fit—either because they don’t invest in their industry, their stage, or their check size.
💡 How to avoid this? ✅ Research first. Make sure the VCs you target actually invest in STR, proptech, or travel startups. ✅ Know their check size. If you're raising $5M, pitching a VC that only writes $50M+ checks is a dead end. ✅ Look at their portfolio. Are they backing companies like yours, or are you the odd one out?
5️⃣ Private Equity: Big Money, Big Trade-Offs
Private equity (PE) can inject serious cash, but it often means: 🚩 Cost-cutting over innovation – Maximizing short-term returns. 🚩 Less flexibility – PE firms often take majority ownership. 🚩 Exit pressure – Most PE firms want to sell in 3-5 years—which might not align with your vision.
💡 STR founders need to ask: Do I want fast growth, or do I want long-term control?
Final Take: Grow on Your Own Terms
There’s no one-size-fits-all answer to funding your STR business. Your path depends on: ✔️ Your business model – Are you asset-heavy or tech-driven? ✔️ Your growth speed – Do you need hypergrowth or sustainable scaling? ✔️ Your long-term vision – Do you want control or external backing?
🔑 The secret? Funding should serve your vision—not dictate it. Choose wisely, stay focused, and build the next category-defining company in STR.
