Would your start-up take on a short-term contracting gig as a team to finance yourselves instead of raising money?
Poll: Would your start-up bootstrap instead of raising money?
1–10 of 37 posts
Re: Poll: Would your start-up bootstrap instead of raising money?
#2Yes! Doing it now. It's not that bad, once you set the right terms for yourself and the projects you take on.
You can also sell fruits and vegetables - but that's another story. So far both are working for me though :)
Re: Poll: Would your start-up bootstrap instead of raising money?
#3Assuming that you believe the compensation for this contracting gig will be enough to sustain the company for a time as if you had been funded: absolutely. At the end of the day, you still walk away with 100% equity and no potential for meddlesome investors.
Re: Poll: Would your start-up bootstrap instead of raising money?
#4If you do already bootstrap your start-up as a team, where do you find the gigs? Referrals? Craigslist, or another contracting site like Monster or oDesk?
Re: Poll: Would your start-up bootstrap instead of raising money?
#5It depends on the startup. If I were starting a company that needs a critical mass to be profitable (eg a social network), and therefore needed more cash up front that could be produced without external funding, then no, I probably wouldn't try to boot strap.
In another example, my hypothetical startup might be able to reach profitability via bootstrapping, but wouldn't be able to grow organically fast enough to prevent competitors with deep pockets from beating you to market dominance. In such a case, taking external funding to scale quickly might be a wise move.
So yeah, I'd bootstrap if my startup lent itself to it, since having more equity is great. Ultimately, though, I'll do what the startup needs.
Re: Poll: Would your start-up bootstrap instead of raising money?
#6I'd rather my startup made money! This is all very much possible. Sure i'm all for raising a fair amount of money (not too much) and being lean. Then making money from the get go.
Re: Poll: Would your start-up bootstrap instead of raising money?
#7I'd rather raise money. For me, startups are all or nothing. I believe focus is critically important to an early stage startup. While splitting time between consulting and your startup gives you a broader view of the world, it spreads you thiner, and means you make less progress with your startup.
I always remember that 100% of nothing is nothing. If you really believe in an idea - enough to spend time on it - raise some money, don't worry that you now own a smaller part of it, and change the world.
Re: Poll: Would your start-up bootstrap instead of raising money?
#8Depends what you're doing, but the #1 cost in some startups is the paychecks (check this for example : http://dl.dropbox.com/u/345057/DIASPORA%207312011%20Profit%2...) . If you find a way to survive while coding, you don't need to raise much money (that's what me and my roomate have been doing for 1 year+)
God only knows what we would have done with 200000$ extra :)
Re: Poll: Would your start-up bootstrap instead of raising money?
#9One of the issues I've seen with startups that do this is that they end up being consumed by the consulting work and aren't really able to crunch on their own thing. Whether it's demanding clients or the cash, your attention gets sucked away from your startup...I've seen people go years without releasing their own stuff when that was their intention from the very beginning, just got caught up in consulting.
But I am very much pro-bootstrapping - save your money while consulting or while working the corporate gig, get your health insurance in line, figure out a method of monetization that starts a good six months before your savings dry up, then quit all outside pursuits completely to focus on your startup.
Re: Poll: Would your start-up bootstrap instead of raising money?
#10Ask yourself how much money your startup could eventually be sold for. $5 Million? $10 Million?
Now divide that by the number of years, divided by 2000. For a $10M exit, working on the startup for 5 years, that works out to $1000 per hour.
If you really think your startup can be sold for $10M or more within 5 years then you should think twice before taking on any contract work for less than $1000 per hour.