Bootstrapping is one of the methods to fund your startup. The owners or the co-founders invest the business via their individual means or resources.
Other forms of business funding include venture capital, crowdfunding, trade equity, business loans, trade equity, and selling shares.
Today we address bootstrapping as a means of business funding.
According to the statistics, venture capital firms have been investing in startups. However, almost 90% of these organizations have failed miserably in just two years of their lifespan. The same studies also state that the startups which do not receive any financial assistance initially, are more likely to flourish.
The reason for the success of bootstrapped startups
As mentioned, building a bootstrapped startup from the ground is certainly a daunting undertaking, but is certainly not impossible. More often than not, bootstrapped startups succeed because of the stake that entrepreneurs have in the business. This dynamic pushes the startup founders to work harder to prove themselves and generate the optimum returns from the money invested by them.
Bootstrapped startups also succeed due to a fact mentioned by Jason Fried, a highly successful bootstrapped entrepreneur. He says that the reason for the high rates of success amongst bootstrapped businesses is that they have no choice but drive their businesses to profitability. They don’t have cushions if they fall. They either make money or go home. For such businesses, money is the equivalent of air that we breathe.
They did it... so can you
The most important thing you can do at this point in your business is to put all your efforts into pursuing positive cash flow and revenue through any means necessary. This could be launching your product or service and getting to the market fast, launching well-planned marketing campaigns, or partnering with already established entrepreneurs. Unless your money is capable of sustaining a customer, don’t spend it.