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In short: market efficiency. Businesses that are innovative and will deliver higher ROI are on average more likely to require capital, which becomes a barrier
by sp527 8y ago
In short: market efficiency.
Businesses that are innovative and will deliver higher ROI are on average more likely to require capital, which becomes a barrier to entry.
The market is much more efficient for ideas that don't require capital injection, and you're therefore playing a much harder game. It's also harder (though not impossible) to make such a business return time-adjusted compensation in excess of what you would make in a job.
There's also the risk. In order to jump ship to work on a bootstrapped company, you would almost certainly need a combination of savings and revenue streams that will sustain you long enough to make the business viable, which could take years. The combined costs of food, housing, medical, and potentially a family are often prohibitive. Taking a VC-backed salary may be the only way to safely attempt working on your business.
Alternatively, you would need to find enough time to make a side hustle viable. Not impossible but, speaking from experience, extremely difficult to manage properly.