How to bootstrap your way to success

How to bootstrap your way to success

Sourcing capital for your startup is never easy, especially when you are pre-product completion and before the proof-of-concept the traditional venture investors are looking for.  Oftentimes, the only way to get your business from a piece of paper concept to a venture-backable business is to bootstrap your efforts, via whatever means necessary.

Below is a summary of the some of the most-used bootstrapping techniques:

Limit Product Scope.  Always start by building a minimum viable product to get something quickly and cheaply into the market.  Cut back on any unnecessary features and functionality, that add up on costs and slow down the launch.  Don’t try building a “Rolls Royce” product out of the gate, when a “Toyota” will work just fine to start.

Personal Assets.  Tap into whatever cash resources you have access to, from your cash accounts, to credit cards to home equity loans to selling other investments.  The less cash you raise from outsiders, the more your personal stake will be worth, especially during the “infancy” stage of your business when valuations will be at their lowest point.

Co-Founders.  Co-founders can be a great source of cash investment or sweat equity from people who believe enough in your product to work without a cash salary.  Don’t think you need to build your startup by yourself.  Find others who share your dream and complement your skillsets.

Friends & Family.  Sometimes it is easiest to raise capital from the people that know you best, and can vouch for your personal drive and skillset, much better than a stranger investor can.  But, be clear with them upfront that they could most-likely lose 100% of their investment in a risky venture and not to invest more than they feel comfortable “gambling” with.

Vendors.  Sometime startup vendors are willing trade all or a portion of their services for equity.  This is a great way to make a R100K tech build a R50K tech build, as an example.  And, even if they require cash, maybe they can spread out payments over time to help you.

Angel Investors.  If you can uncover them, there are plenty of rich individuals looking for the next big thing.  The problem is finding them.  Re-read Lesson #5 for best techniques for finding angel investors.

Startup-Investor Marketplaces.  There are some great sites like AngelList and Gust, that have created networking sites with startups on one side and angel investors on the other.  Problem is getting your startup found within the clutter of other startups.

Crowd Donations Sites.  Sites like, and have even made it easy to raise capital via donations from a crowd, without giving away any equity in your business.  This works best for “edgy” consumer products businesses, where donating consumers can get insider access to the first products built.

Small Business Grants.  Sometimes free grants are available if your startup is helping to solve a bigger problem (e.g., healthcare, education).  Check out NYDA, IDC and DTI to see if any grants are available in the market you are serving.

Small Business Loans.  Working with the banks as a startup is not usually advised, given how conservative the banks can be.  But, some banks are more startup friendly than others.  The Startup Bank is one of those banks.  You may be able to get a R50,000 startup loan, basically set up like a new credit card account.

Free/Discounted Resources.   Always keep your eye out for free or discounted resources for startups.  Don’t pay for consulting, if you can get free mentorship from a peer.  Don’t pay for rent, if you can hangout out at a free shared meeting place.  And, check out preferred vendor discounts for startups negotiated by organizations like The Startup Foundation

The key for being a good startup CEO is learning how to stretch pennies into man-hole covers.  Hopefully, this module helped you learn how to best stretch your very limited cash resources and find cash resources from previously unknown methods

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