Five Reasons Why Bootstrapping is better for a Startup

Startups main concern is funding. They need an investor who would be ready to fund their ideas or products and help them grow. But, recently many startups are opting for bootstrapping. What is it and why you should consider it?

If you assume a startup is all about thinking something innovative, pitching it, getting an investor, funding the company and making the profits, then you are simply wrong. It is much more than that. A startup has several steps from concept to marketing. None of these would work if you do not have sufficient funds; and funding is no easy thing especially if you are looking for an investor.

You must meet at least ten investors to get one interested. This purely means a lot of product development time is wasted! Instead, using your own fund could save a lot of meeting and pitching time. ‘Bootstrapping’ is recently introduced, and means using your own funds to develop an organization from virtually nothing. This, nowadays, is voted as the best way of funding young startups. Here are five reasons why bootstrapping your startup can do wonders.

#1 Focus

Not having enough money in your company bank account will automatically put you on the gear. The fear of going broke any day would make you sit up and think of ways to generate revenue. In other words, you will automatically start picking up meaningful ideas – ones that will ensure revenue from day one. There is no valuable time lost on ‘building a revenue model’ or ‘aiming for user growth’. Almost 90% businesses in the world function in this manner and they succeed too!

#2 No ‘Bosses’ Tracking You

When an investor invests in your company, it is not a one-time transaction that is carried out. You are actually building a relationship with them that would last till your company lasts. This means the investors must be kept in loop about every new decision taken and progress made. This automatically involves countless meetings, permissions before making purchases, constant justification, etc. How different is it from working in a company and getting bossed?

#3 Value of Money

Money is constantly at the back of your mind when you have no external funding for your startup. This helps you think of economical alternatives and increases your performance level. This is one of the most important traits an entrepreneur must have. Often, entrepreneurs spend money on the office set-up and fancy items. This results in frivolous expenses, and sometimes they are left with no money for the right things.


#4 Stay Away from Dubious Characters

Mentoring is always good. However, good mentors are hard to come by and you need to do your own hard work and research for the same. There are some meta-startups for whom a startup is a real client. They invest money in your startup for a certain percentage of ownership. Although some of these may be genuine, there are a lot of dubious characters who would simply vanish one fine day with your money and product to make a name for themselves. A bootstrap helps you be self-sufficient and stay away from such dubious characters.

#5 Experiment Only What Sells

Bootstrapping limits your funds and therefore you are forced to view from the customer’s lens. You only experiment on products that would actually work and eliminate unnecessary stuff. For example, I am extremely passionate about analytics. However, I cannot keep on experimenting the different branches of analytics to make a viable product. I need to first take customers view on how analytics could be best used and make a viable, saleable product.

Bootstrapping is an excellent move since you are your own boss and grants you the freedom to grow exponentially. The pressure is on the productive front and not on the unnecessary administration and resources front.

About Author:


Vikrant Bhujbalrao,
Chief Evangelist,Success Connector,Life Coach,Motivator,Entrepreneur!
111 Startups, How’s Life!