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But if you're bootstrapping you can just make money doing consulting for a few months each year. Between having a job or having a VC-backed company, bootstrappi

But if you're bootstrapping you can just make money doing consulting for a few months each year. Between having a job or having a VC-backed company, bootstrapping seems like arguably the lowest risk option of the three.

hpcjoe 6y ago
I did that at the beginning. Until I had enough cash to build and market product. But it was barely enough cash. Then big orders started hitting. Before I knew it, we were at $3MM/y sales, growing about 33% yoy. And then we crashed. We needed more capital. Those who wanted to put money in via convertible notes demanded terms that would have killed the company's ability to raise capital going forward. Our lawyers told us that it appeared that the large company wanted to buy us on the cheap, and these terms enabled that. I've replayed that in my head many times. It was a crappy deal, and they weren't willing to budge. But I would have had a sort-of-exit had they exercised one of the convertible clauses, to basically demand payment in full if we couldn't raise more money. If someone tells you corporate VC is less slimy than the regular version, don't believe them. Different type of slimy, but still slimy.
hpcjoe 6y ago
I should also point out that this is a common misconception for hardware/solution companies. Very hard to make enough money to fund R&D with consulting. I did that for the first 4 years of the company. Put bluntly, that model, the consulting bit, is not for the faint of heart. It is just as hard, as in you absolutely have to hustle hard this whole time, to get business. Leaving you with precious little time to develop your ideas. I've lived it. I don't recommend it, without a partner with a strong income. My wife was a stay-at-home mom for part of this time, and worked at a school as a teacher. Not sufficient income to live off of for 1 person in a house with a mortgage. Nevermind a family.
- Alex3917 6y ago
  Right, it doesn't really work if you need to spend a lot of time selling consulting. It works better if you write a bestselling book at some point so that you're recognized as the #1 person in your field, and then you just have a waitlist of clients willing to pay $250 an hour or whatever. That way you can just consult a few months a year and still support a family, and then spend the rest of the year working full time on your startup.
  - pragmatic 6y ago
    Are you serious? You keep upping the ante. Just consult, just write a best selling book, then consult. I'm assuming you're joking.

hpcjoe 6y ago

I did that at the beginning. Until I had enough cash to build and market product. But it was barely enough cash. Then big orders started hitting. Before I knew it, we were at $3MM/y sales, growing about 33% yoy. And then we crashed. We needed more capital. Those who wanted to put money in via convertible notes demanded terms that would have killed the company's ability to raise capital going forward. Our lawyers told us that it appeared that the large company wanted to buy us on the cheap, and these terms enabled that. I've replayed that in my head many times. It was a crappy deal, and they weren't willing to budge. But I would have had a sort-of-exit had they exercised one of the convertible clauses, to basically demand payment in full if we couldn't raise more money. If someone tells you corporate VC is less slimy than the regular version, don't believe them. Different type of slimy, but still slimy.

hpcjoe 6y ago

I should also point out that this is a common misconception for hardware/solution companies. Very hard to make enough money to fund R&D with consulting. I did that for the first 4 years of the company. Put bluntly, that model, the consulting bit, is not for the faint of heart. It is just as hard, as in you absolutely have to hustle hard this whole time, to get business. Leaving you with precious little time to develop your ideas. I've lived it. I don't recommend it, without a partner with a strong income. My wife was a stay-at-home mom for part of this time, and worked at a school as a teacher. Not sufficient income to live off of for 1 person in a house with a mortgage. Nevermind a family.

Alex3917 6y ago
Right, it doesn't really work if you need to spend a lot of time selling consulting. It works better if you write a bestselling book at some point so that you're recognized as the #1 person in your field, and then you just have a waitlist of clients willing to pay $250 an hour or whatever. That way you can just consult a few months a year and still support a family, and then spend the rest of the year working full time on your startup.
- pragmatic 6y ago
  Are you serious? You keep upping the ante. Just consult, just write a best selling book, then consult. I'm assuming you're joking.