BOOTSTRAPPING IS THE NEW FUNDRAISING
Raising outside funding for your startup is an area most entrepreneurs feel uncomfortable with. And who can blame them? It can certainly be daunting to pitch one investor after the other while developing your mobile app of product.
But what if there was an easier way to get the much-needed funds to realize your dream?
Well, it just so happens that there is. Bootstrapping is a nifty way of launching a company an with little capital, usually with your own personal finances. Yes, you won’t be able to do everything you have planned off the bat and you will have to postpone scaling and development of some features but there are numerous benefits to using this method.
Some of the most successful brands started as nothing more than self-funded startups. Just think of Airbnb, Apple, Dell, eBay, Facebook, GoPro, Microsoft and Oracle, to name a few.
When you think of bootstrapping, one thing comes to mind: control. Starting a company from scratch and without outside resources and funds is difficult but it puts you in control of the entire process. You learn how to cut back on unnecessary costs, how to prioritize and how to hone your business model and idea to make them the best that they can be. All of these experiences are invaluable in building you as an entrepreneur and add substance to your product.
Turning away from VC, angel or seed capital allows you to retain your freedom and leave more room for pivoting or experimentation. This gives you time to figure out what you want your startup to be and make it capital-efficient before approaching investors. And this makes a huge difference. The example of EdTech startup Pluralsight comes to mind. After bootstrapping his company, Aaron Skonnard went on to raise $16 million in revenue before raising a $27.5 million Series A at almost a $100 million valuation. From there on, the company has gone on to follow a roll-up strategy with additional funding, gone public, and is currently valued at close to $4 billion.
What this shows is that bootstrapping brings a host of benefits to the startup and its founder(s). Without VC, there is no pressure for hypergrowth and you can focus on defining your target customers, fixing your business model, validating your idea and making your product better. Bootstrapping means growing at your own pace and making decisions about your company from a place of research and authority rather than outside pressure and time constraints. And this pays off big time.
When we talk about digital products and development, we often say that there is no ‘one size fits all’ solution. Surprisingly, this doesn’t apply to bootstrapping. The method of self-funding works well equally well for companies in the Fintech, EdTech, AdTech, MarTech, FemTech, and other sectors.
While bootstrapping can take your company a long way, you can always turn to outside funding when the time comes. One of the biggest benefits of bootstrapping a startup is that just about anyone can do it. That’s not to say that aren’t any obstacles that must be overcome. However, by putting your resourcefulness, creativity, and intelligence to good use, you’ll find that bootstrapping your company can be a fun and rewarding experience that produces incredible results.
At Mind Katalyst we build custom apps across different platforms and emerging technology including iOS, Android, Augmented Reality, Blockchain, Artificial Intelligence/Machine Learning, Wearables and IoT. We help organizations and entrepreneurs build their minimal viable products (MVP’s), iterate to product-market fit, or scale big.
By bringing to the table top tech talent in iOS, Android and backend development, the Mind Katalyst team is motivated by a deep appreciation for building meaningful, relevant and functional apps.
For more on how Mind Katalyst can help you scale your technology products, contact us for more details.
Carnellia Ajasin CEO of Mind Katalyst, is passionate about inventing new technology products in the emerging technology space that are meaningful and relevant. She works with ambitious organizations and businesses on the strategic application of innovation, creativity and emerging technologies to create competitive advantage, transformative impact and growth in business and society.
