Monday, July 28, 2014

8 Intelligent Reasons Why Entrepreneurs Should Bootstrap Startups

One of the earliest, most critical decisions an entrepreneur must make is whether they should raise outside capital through investors or self-fund a startup by bootstrapping. Your business's chance of success and your relationship within the company can be determined by how you decide to fund your company. Here are our top five reasons why you should consider bootstrapping:

  1. Creative Freedom- Bootstrapping allows for a company to have freedom without having an "outside" voice trying to protect its investment. When you bootstrap, you are the creator and that voice. Bootstrapping allows for more control over your business in the beginning. 
  2. Better Products- Bootstrapping allows for one to have a better control of their products and services. The pressure of having a shorter runway will allow business owners to get their products right since every last dollar matters.
  3. Smarter Decisions- Lets face it, you are more cautious with your own money as compared to someone else's. Bootstrapping with incentivize you to intelligently grow you business and ultimately become a better manager. 
  4. Faster Progress- There is usually less time to get your company up and moving because there is less cash being used. This is one of the greatest motivators to quickly build a product and offer it to the market. Iterating and rapidly testing are both cost-effective and efficient ways to help your product. 
  5. Higher Stakes, Higher Rewards- You are your only stakeholder when bootstrapping. You retain equity as well as control. It also aligns your incentives with the success of the company, allowing for ownership to remain clear and manageable. 
To continue reading if bootstrapping is the right way to fund your business, click here.