Open source vs. closed: How important is the tech platform to investors?

Right now we are building our MVP using open source mostly due to local access to talent, budget, and time. In preliminary discussions with investors, some tell us it's absolutely imperative that we build it on a closed platform like Rails so that it becomes more attractive for an exit. While others tell us that they would rather it be built on open source as long as it still offers optimal performance. We're coming at a crossroad where we'll need to make that decision soon. Some insights would be appreciated. Thanks!


There is a difference between your product being open source versus the tech stack you use to build it being open source. You use email to conduct your business, and that's based on an open standard!

Whoever told you it's "absolutely imperative" that you use Rails instead of an "open" language like PHP ... run as far away from working with that investor as possible.

Just because your programming language is open source doesn't mean acquirers will value you less.

The only way this would come into play is for practical matters. The largest possible one being that the acquirer is on Rails and you're on PHP, so they are less excited because they'll need to rewrite your stuff from PHP to Rails or now also have PHP in their toolkit.

Another minor possible consideration is that open source stacks can sometimes be more exploitable (i.e. security risks), but that's unlikely to affect acquirers.

Answered 7 years ago

Never ever build to satisfy the advice of investors. If you're looking for outside advice on something as critical as what platform to build on, focus on adding stronger technical talent to your team.

As a rule, investors who tell you "I'd be more interested in potentially investing if you do x" are a waste of your time. If on the other hand, you're initiating the conversation ( e.g. What do you think we should build on) then you're signalling you're not ready for investors.

As a product guy and angel investor, happy to do a call with you to understand your team, what decisions you are facing and help plot an actionable path to getting on track to being ready raise investment.

Answered 7 years ago

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