[SOLVED] boot$trap funds

this might not be the right place .. but i’m curious, after reading here:

http://modxcms.com/forums/index.php/topic,51826.0.html

.. about ..

over a million dollars in bootstrapped funds

how does that work?
why would anyone donate to, or invest a millon bucks in an open-source project? (not that it ain’t worth it, of course.)
do they hope to recoup their investment?
or is it charity?
corporate sponsorship?
where did the money go?
can i get some? =)

MODx .. the millon-dollar CMS. Literally.

i mean, a million bucks is a LOT of broccoli .. especially these days, when the economy suks so badly.

are these questions taboo? or in bad taste?

A million bucks in bootstrapping is actually pretty modest for a new-ish tech venture. There are lots of potential sources of funds - the owners, employees, banks, angel investors, foundations, suppliers in the vertical chain, bigger companies etc etc. It’s unlikely, but not impossible, that someone just rolled up with a wad of cash, slapped it on the table and told Ryan, Jason et al to go off and play with PHP, JS and PDO.

The crucial point is that ’open source’ does not equal ’not for profit’.

The bigger you get, the easier it is to attract further funding. And bear in mind that the MODx folk eat their own dogfood, and develop MODx sites for other people. Most open source software developers rely on others paying them for professional services, other developers/suppliers paying for partnerships and accreditation, and further ’philanthropic’ funding. There’s an entire service industry around Drupal, WordPress and Joomla - and the beginnings of one around MODx, ExpressionEngine and Silverstripe.

Also, the MODx crew derive some value from the community - as unpaid testers, tweakers, marketers, trainers and occasionally, spare hands. So there is ’informal’ and ongoing ’funding’ to consider as well. I worked for an innovation agency here in the UK specialising in open innovation, and applying open innovation to new spheres (healthcare, environmentalism etc) - and there are lots of sound economic reasons to invest in _specific_ open source projects (note: not just because it’s open source).

The top 100 UK agencies all turned over more than $2.5M in 2010, so you don’t necessarily have to be all that big to recoup that investment - if indeed you have to repay it (an old friend of mine just landed a $120k account and there’s only two of them in the agency - that must have been a sweet day).

Anyway. I’ve jabbered on enough, and cost myself 15 minutes of my day (I’m a nerd, I had to look up the figure I quoted in the previous para).

Over the last 7 years I’ve spent more than a million bucks in paying folks to help on projects, both as contractors and employees. Every project we did went towards making MODX better, and every project was a MODX project. Donations don’t remotely cover the costs (just over $50K over the entire life of the project), but we’re very thankful for them to be sure!

We’re now going full time on MODX, and will be launching our commercial support services and officially announcing our Partner program in the very very near future. One of the iron-clad pledges we’ve made to our Partners is that we won’t compete with them, so we’re out of the site building business that supplied the bootstrapping funds. More details soon (via the new website).