 "Playing the VC game versus bootstrapping")
Having been involved in a few start-ups, I thought I would mention some things about playing the VC game and looking for external funding compared to bootstrapping a company. One of my mentors gave some good advice when I first started to explore the world of start-ups and business by saying that he was reluctant to get external funding if it could be avoided. This is, in my opinion how all start-ups should think. With external funding comes more responsibility and a level of reporting that you don’t have when bootstrapping.
Bootstrapping
The idea of bootstrapping is to run things lean, pay for the things you need and to grow somewhat organically to a point where you break even and/or become even profitable. To run a bootstrapped company you will often need some savings. If you cannot fund it yourself as the founder then you are going to have a hard time of convincing others to work for free and share the big vision with you. If you start to see your business take off then you have two options, keep bootstrapping and invest the extra cash or use the validation to seek external funding.
I call it the VC game as it is pretty much a game. It is a merry go round of making the right connections and impressing the right people. These people are the guys who can make or break a company, turn a vision into a billion dollar company and provide the capital to take your idea from an MVP to millions of customers.
Should I transition?
Chances are that if you have not had an exit at a startup and are fairly new in the community, you will have no choice than to start a company in the bootstrapped way.
This is an excerpt from Tech in Asia. You can read the full article here.
Stuart Lansdale is first time founder with Roomfilla, has experience with only XO organisations and has launched various start-ups.
