“Your odds for finding funding right now for an early-stage company are not looking good.” Ilya Pozin, Inc.com
For this reason, most startups need to figure out ways of raising their own money before they are able to approach outside investors. Bootstrapping is a financing strategy where you start a company with your own resources: personal assets, revenue from customers and various other methods listed in this article.
At last week’s Entrepreneurship 101 lecture, serial entrepreneur Charles Plant discussed the pros and cons of bootstrapping and how to make smart decisions when investing YOUR money.
According to experts, 75% to 85% of startups use some form of bootstrapping to help finance their business. Believe it or not, even Apple Inc. started out this way. Charles explains how they achieved bootstrapping success in the lecture video. Other companies funded by bootstrapping include: HP, Coca-Cola, Dell and Microsoft. Check out this article for more companies that made it all the way on bootstrapped funds: “Bootstrapped, Profitable and Proud”, 37signals.
Bootstrapping is not easy and requires a certain amount of discipline. It also requires taking risks: putting your own assets on the line and using a personal credit card or loan to fund your business. For tips on minimizing risk, check out Inc.com’s article: 7 Rules for Bootstrapping a Business.
During his dynamic lecture, Charles provided us with several tips for carrying out a successful bootstrapping strategy, all of which are included in the lecture video. His key to success? Repeating the formula over and over again to achieve exponential growth – that’s when you are ready to go out and raise money.
For a lecture summary, check out the Quick Hits video:
Click here for the full lecture video.
For additional resources you can tap into while you bootstrap, check out our Funding Sources Directory.
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