Wednesday, August 6, 2014

Founders Share Their Bootstrapping Experience + Some Awesome Tips

[Instead, these are four arguments for why not taking on early
investors could also be a smart path to take.]

Bootstrapping Forces You To Test Before You

By definition, a startup is still attempting to prove its business model. To
do so, the founders must empirically experiment with every aspect of
their plan — pricing, distribution, partnerships, everything. More tests,
performed faster, translate into more knowledge about what’s truly
worth investing in.

If You Misspend Your First Round, Getting a Second One Is Borderline Impossible

As Brad F. told me, it’s extremely important to be able to show a
second round  investors how efficiently you spent your first.

Raising Money Is a Full-Time Job

Ask any entrepreneur who has successfully completed a fund raising
phase, and they’ll tell you that it monopolized their time for months — if
not longer.

The More You Spend, the More You Waste

The “shampoo theory” of economics is the most simplified psychological
explanation for why a startup’s spending becomes more inefficient as its
budget gets bigger. When you get a new bottle of shampoo, you’re more
likely to use it every day, and more of it. You might even find yourself
shampooing parts of your body other than your head.

But when you get to the bottom of the bottle, you won’t use it every day,
you use it in smaller portions, and it most assuredly gets used only where
it was meant to be used. ]  - - -Weston B

***Originally written by different Author 

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