Bootstrapping is one of the best things a young startup can do. Bootstrapping means self funding your business, without external investment. Putting in your own money has a lot of advantages.
- Focus on Revenue: Since you do not have a lot of money to burn, you tend to be more focused on building a solid revenue model to be able to bootstrap further. On investor money, we have seen a plethora of startups throwing money at acquiring visitors and customers, without having a concrete revenue plan to monetize them.
- Flexibility: Since there is no investor overseeing you, an entrepreneur can experiment and innovate faster, without having to answer anyone.
- Builds Conservative Behavior: All expenses will be carefully planned and examined due to the shortage of money, thereby ensuring that money gets used optimally in the longer term.
- Saves a Lot of Time: Fundraising is a long and time-consuming process. With bootstrapping, you can focus and spend your time on developing your business rather than in finding and presenting to investors.
- Saves you Equity: The faster you raise money, the more equity you let go. The more you can bootstrap and grow the business, the less equity you will have to offload for the same amount of money (since the business traction is at a higher level and risks are hence lower).
- Focus on Revenue: Since you do not have a lot of money to burn, you tend to be more focused on building a solid revenue model to be able to bootstrap further. On investor money, we have seen a plethora of startups throwing money at acquiring visitors and customers, without having a concrete revenue plan to monetize them.
- Flexibility: Since there is no investor overseeing you, an entrepreneur can experiment and innovate faster, without having to answer anyone.
- Builds Conservative Behavior: All expenses will be carefully planned and examined due to the shortage of money, thereby ensuring that money gets used optimally in the longer term.
- Saves a Lot of Time: Fundraising is a long and time-consuming process. With bootstrapping, you can focus and spend your time on developing your business rather than in finding and presenting to investors.
- Saves you Equity: The faster you raise money, the more equity you let go. The more you can bootstrap and grow the business, the less equity you will have to offload for the same amount of money (since the business traction is at a higher level and risks are hence lower).
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