Undoubtedly, VC funding is a very helpful option for companies that need capital in order to rapidly scale, but in an age of high-valuations where even great ideas may not make it, some startups might want to consider alternatives that will not leave them with the added pressure of investors breathing down their neck.
Many entrepreneurs are focused on perfecting their VC pitch without considering the long-term impact, especially when securing funding does not always equate to success. In addition, the time and effort it takes to raise capital can take away from the time and focus required to perfect product or service offerings. Early-stage bootstrapping can teach entrepreneurs valuable lessons in budgeting and prioritize so those funding rounds can be spent wisely in the future.
Here are some tips for bootstrapping startups:
Securing Your First Customer Is Top Priority. Experts feel that running a lean and targeted business, in the beginning, is always a good idea. Companies should always work towards securing the first customer and not waste a lot of time on the product.
Be Cognizant Of Spinning Your Wheels. Ineffective processes and bureaucracy can lower productivity and be very costly for companies. Workers often point out that unnecessary emails waste their time. Inefficiency can cause businesses to spin their wheels, making it tougher to launch products or services.
Many startups make the mistake of aiming for perfection before going to market, but this is a risky move when competitors may be working faster. And not to mention, getting customer feedback after the initial launch provides valuable insight and often leads to changes that can better the business.
Consider A Partnership. Entrepreneurs who are passionate about their vision might struggle with sharing control, but finding a partner who believes in the idea and has complementary skills can be a good way to share the workload and lighten the day-to-day pressure. However, ensuring you and your partner are on the same page is very important.
When It’s Time To Raise Funds, Consider Crowdfunding. In lieu of traditional VC funding and controversial Initial Coin Offerings (ICOs) relegated to blockchain projects, consider crowdfunding for your bootstrapped startup.
Some of the successful startup project fundraises have reached into the tens of millions. Even in failure, crowdfunding can help startups “fail fast” and know where to pivot to next.
We hope these tips would be helpful for those entrepreneurs who are bootstrapping for their startups.