Menu

December 12, 2016

[Video] Which is better: Bootstrapping or raising capital? – Bobby’s Minute, ep. 76

It really depends on what kind of business you want to run.

For more similar videos, subscribe to the YouTube channel.

Transcript:

Is bootstrapping better than raising capital? Well, it really depends on the type of business you want. If you want a lifestyle business, then bootstrapping is the way to go. If you want a high-growth business, you can try and do it by bootstrapping, but chances are you’re going to need a lot of money, faster than you can generate revenues.

So, if you want a high-growth startup, you’ll need investment. Most of the companies try to do a hybrid model. They usually bootstrap the early stage and then they raise capital at a later stage, because the valuation is better. We’ve done that with Mavenhut.

The biggest company that I know of that that’s done that is Evernote. I think they bootstrapped the initial stages and they got a small investment of a half-a-million dollars and then they raised the bigger investments. So, it really depends on the business model that you want.

If you want a business that you want to leave to your kids, then you probably don’t want to get investment from an outside source, but if you want to have a high-growth startup a company that can keep the revenues up with their growth, you need an investment, because, otherwise at some point, you run out of money.

For more similar videos, subscribe to the YouTube channel.

Leave a Comment