According to Tim Berry in this post, Bootstrapping is better if you can get away with it, but can be bad if you end up stifling a business that might have prospered with more capital. Don’t spend more than you take in.
What does he mean by this?
Well, the way I understand it, every business has to grow and this is one of the goals that we business owners are looking forward to. Tim really made sense and in that case, bootstrappers should also learn to assess the business if a venture capital would really help the business grow and if we bootstrappers can really close a venture deal.
2 responses so far ↓
Tim Berry // January 9, 2009 at 12:52 am |
Ouch! I hate it when my writing is that muddy.
I believe that not all businesses can be effectively bootstrapped. Some, because of the nature of the business itself — product design costs, channel development costs, web development costs, achieving critical mass, for example — can’t be bootstrapped. It’s just not realistic.
That’s what I was referring to with the idea of stifling a business that might have prospered with more capital.
And I also believe that for anybody who is building a business that has the option, doing it yourself, without outside investors, is the way to go.
A lot of my thinking is the result of personal experience. Building Palo Alto Software to where it is now, without outside investors, was hell in some of the hard times near the beginning; and it took a lot longer that way. But now that it’s there, and its entirely owned by me and my wife and our kids, in my case it was well worth it.
Thanks for this post. And yes, you did understand it right … I just wish I’d made it clearer the first time around.
Tim
Bianca Aquino // January 15, 2009 at 7:32 am |
Hi Tim,
Thanks for dropping by here and adding more substance to my post. And you are welcome because your post is really worth noting for.
Greetings,
Bianca