Bootstrapping - How to get Funded?

If you’re thinking of launching a startup, you have probably asked yourself: How much money do I need to raise and how am I going to do it?

You don’t have to raise a ton of money to get your startup off the ground. In fact, you might not need to raise any money at all. In fact, there are plenty of successful startups that have bootstrapped their way to success – without any outside funding from angel investors or VCs. Entrepreneurs who are self-made – that is, they bootstrapped their way to success – are a rare breed. To start a business and bring it to successful fruition takes a sound mix of confidence, risk tolerance, self-discipline, determination, and competitiveness.

While bootstrapping your startup can feel scary, but it shouldn’t feel impossible. You just need the right strategy and a lot of hustles. One of the biggest advantages of bootstrapping your startup is that you can keep full control over it from day one. Instead of having to convince angel investors or VCs, you just need to believe in yourself and put in the arduous work required for success.

To run a successful bootstrapped company, an entrepreneur must execute a big idea, focus on profits, develop skills, and become a better businessperson. All successful bootstrapped businesses will go through three stages -

• Self-Funded: The founder continues to work a day job as well as start the business on the side. So, funding your business through your own savings and personal income must be the first step. You will develop your idea and work towards creating the MVP (minimum viable product) of your company.
• Customer-Funded: This stage is all about scaling your business and making it as profitable as possible. Hence, money from customers is used to keep the business operating and, eventually, funds growth. Once operating expenses are met, growth will speed up.
• Credit Stage: You have reached a point where you have regular and predictable cash flow that can be used to service debt. The entrepreneur must focus on the funding of specific activities, such as improving equipment, hiring staff, etc. At this stage, the company takes out loans or may even find venture capital, for expansion. This is the point at which most bootstrapped businesses will raise funding from outside investors if they wish, or even look to an IPO.