Why Bootstrapping is So Important

I publish this series to discuss the nuances of bootstrapped entrepreneurship. Please subscribe to my Best of Bootstrapping series to never miss an article and?learn what to expect from 1Mby1M.

You may have read my Bootstrapping to an Exit piece, where I highlighted the importance of facilitating capital-efficient startups and smaller exits, including with small chunks of investment.

In working through the current landscape of our industry, a few trends become evident:

1. A large percentage of VCs are chasing Unicorns
2. Too much money chasing too few deals capable of delivering hyper growth bids up valuations
3. Many?Death by Overfunding?tragedies have emerged
4. Entrepreneurs are reacting, as Erin Griffith pointed out in her NY Times article:?More Start-Ups Have an Unfamiliar Message for Venture Capitalists: Get Lost

My observation, having covered Bootstrapping for a dozen plus years, is that the industry doesn’t fully understand Bootstrapping.

No, Bootstrapping and Venture Capital are NOT necessarily mutually exclusive.

The savviest and most successful entrepreneurs have?Bootstrapped First, Raised Money Later.

VCs LOVE to invest in bootstrapped startups that have validated and de-risked their ventures before institutional capital is invested.

There is nothing wrong with that approach, as long as entrepreneurs understand a few key principles:

1. VCs love to come to the rescue of victory
2. Do not go to VCs as beggars, go as kings
3. Excess is not a requirement for success
4. Entrepreneurship = Customers + Revenues + Profits; Financing and Exit are Optional
5. Hypergrowth is not a natural phenomenon, but VCs demand it

I do not believe entrepreneurs should tell VCs to get lost.

I am writing this bootstrapping series on LinkedIn to debunk many of the myths that exist on the topic.

Looking For Some Hands-On Advice?

For entrepreneurs who want to discuss their specific businesses with me, I’m very happy to assess your situation during my free online?1Mby1M Roundtables, held almost every week. You can also check out our free?Bootstrapping Course, our?Udemy courses,?YouTube channel,?podcast interviews?with VCs and Founders, and, to?follow my writings, click "Follow" from?here.