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There are a lot of terms that float around the entrepreneurial space. Venture investment, equity, exit, seed, pre seed, proof of concept, angels, warrants, conversion and valuation are just a few.
Many, if not most, people misunderstand these terms in varying degrees. Even professionals who work in the entrepreneurial industry debate the edges of the definitions for each. One of my favorite terms in the business is bootstrapping. Bootstrapping? Are we on a ranch? How do boots help a founder manage her or his start-up company?
To help us understand bootstrapping, let’s first refer to the definition. Bootstrapping is a self-sustaining process that proceeds without external help. Proceeds without external help.A self-sustaining process. Without external help.
No external help? Am I, as an incubator manager, really considering the notion that startups may do better without external help and then writing a blog about it? Doesn’t TechTown provide external help? Don’t we exist to serve new startups by helping them access external support? Aren’t we working tirelessly to connect entrepreneurs to the customers, talent, capital, branding and physical location necessary to create amazing new businesses? Yes, we do and we are.
Some of that help is the delivery of serious doses of reality to our clients. What the concept of bootstrapping portends is not that you deny external resources to launch and grow your business, but rather that you bring those resources in with purpose and intent – understanding with absolute clarity the extent of the impact it makes on your business.
For instance, understand that customers are more important than external investment. Be clear that your own money is easier to negotiate than someone else’s and successful business owners are not frivolous or cavalier with resources. Know that volunteers are less expensive than employees, passion is the fuel for your company’s engine, creativity is free and sleep is overrated.
Bootstrapping isn’t a b-school concept to be studied, deployed and measured; it’s a state of mind. It’s knowing that the most important resource your new business possesses is you, and the more tenacious you are about the journey, the more successful you will be.