3 ms·
"better" is subjective. Bootstrapped gives you more control over the business but it also makes it harder to expand once you have product market fit (exceptions
by codegeek 5y ago
"better" is subjective. Bootstrapped gives you more control over the business but it also makes it harder to expand once you have product market fit (exceptions are always there). Bootstrapped means you most likely have yourself or may be another co-founder who have to share the burden of all the challenges and downsides. Bootstrapped means you probably cannot pay the best money to top talent and unless you are in an upcoming/hot space, you will have trouble attracting the best talent. VC funding brings tons of its own challenges. Right off the bat, you now have a pressure to deliver a fast paced/hockey stick growth or your investors won't make money. Making money for investors becomes a higher or at least same priority as making revenue for the company in general. You now have to answer to people you would rather not in many cases. Not to mention the public scrutiny it brings. However, the plus of VC backed is that you have money to attract top talent and can offer a lot of incentives that are harder as a bootstrapped company.
I think everyone should do their 1st company bootstrapped (I am biased obviously). This will force you to be frugal with spending habits while trying to optimize revenue with least waste. It will also make you come up with creative ways to survive/grow and find product market fit. The downside is that you may run out of money or never reach enough traction as you may not be able to build a great team quick enough in cases.
I would say it depends on your goal. If you want to grow super fast and build a billion dollar company, you definitely want to go the VC route. If you want to start something that replaces your job and then may be grow a bit more with a small team, bootstrapped is the way to go. Sometimes a bootstrapped business can become VC backed and vice versa.
- dougSF70 5y agoI think attracting top talent is a point worth exploring. Surely with all venture back start ups , having money to attract talent doesnt mean you will attract talent. ...competitors have money too. Furthermore, what is top talent? From a top school? Possibly, but not definitely. Also has anyone shown that top talent is a necessary and sufficient condition for success. Personally I think the measures of assessing talent are moderate predictors of success. Scarcity of resource drives up talent costs not effectiveness of talent (i.e. the talentedness of candidates)
- dougSF70 5y agoAdding to this, there are plenty of well funded start ups stuffed full of talent that have failed. Talent is one ingredient, but if the product is good enough you probably dont need to pay for top talent,you only think you do.