Pitching to investors part IV: It’s presentation time – are you ready?
September 27, 2020
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November 10, 2020Series: Bootstrapping your tech startup to success, Part I – What is bootstrapping and is it right for you?
Welcome to our latest entrepreneurial series. This one covers bootstrapping, with tips and advice on the best way to get your business moving with minimal funds.
We will start off the series by addressing the basics: Namely 1) What is bootstrapping? and 2) is it something you can pull off?
Bootstrapping is, in short, the process of self-starting your business – using your own resources and skills to take your idea to market. Here are just a few of the ways this is typically managed:
- Invest: Use your own funds, such as savings or your employment income to cover early running costs.
- Borrow: Ask friends and family (with a promise to pay them back in full).
- Sell: Bring a minimum viable product to market and get first revenue coming in so you can use that to finance growth.
- Sell before delivering: Further to the above point, consider selling before even making or delivering your product or service. The idea here is to charge upfront for partial or even full payment to cover expenses associated with your offering.
There are plenty of other ways, but you get the idea. Bootstrapping is essentially about avoiding outside investment.
So you must now be asking yourself – is this the right approach for my business? In order to answer that, you will need to consider the following:
- Budget: Have you created an airtight budget that realistically details all potential costs? That is your starting point for deciding on whether bootstrapping will work for you.
- Getting to a market-ready product: With a services offering it is often the case that you can simply launch and no heavy advance investment is needed. But a product is an entirely different animal. Can you really develop that product and get it to market with your own funds?
- Who is doing what: You’re unlikely to have the funds to hire much (or at all) while bootstrapping, so you’ll need to be prepared to wear many hats. Who is going to help you when you max out on time and energy?
- Support: Carrying on from the above point, the more knowledge at your disposal, the better. Whether it’s a mentor, a partner, or outsourced help, decide what your support network needs to look like – and start building it.
- Reinvest: Now is not the time to be taking profits. Any money you make should be immediately reinvested in your business. Are you willing to live on an absolute basic salary (or no salary at all) until things get going?
This wraps up Part I of our bootstrapping series. Part II will cover the advantages and disadvantages of bootstrapping. Until then, consider the above points carefully, as the decision to bootstrap is not one to take lightly. It can decide the entire course of your company.
