Home The Downside to Bootstrapping

The Downside to Bootstrapping

Bootstrapping your startup has a number of advantages. Rather than focusing on raising capital, you can spend your time generating revenue. Bootstrapping encourages you to be flexible, allowing you to change direction rapidly and resolve issues of product-market fit earlier. Bootstrapping forces efficiency, because after all, you cannot spend what you don’t have. Successful bootstrapping also demonstrates great management skills – the ability to define a product, get it to market, and generate sales. All these advantages can be incredibly valuable when you do decide, in fact, to approach investors.

But as VC Gil DIbner, Principal at Gemini Israel Funds recently wrote, there’s a downside to bootstrapping when that time does come to pitch investors. Dibner calls this “trench-vision.”

Bootstrapping your startup is incredibly demanding – not just financially, but physically and emotionally. “Bootstrapping founders are like soldiers engaged in hand-to-hand combat deep in the trenches,” writes Dibner. “They are fighting their way forward one knife-fight and one customer at a time. It’s slow, painful, and all-encompassing. Ironically, the focus and determination needed to prevail down in the trenches of bootstrapping can work against you when you are sitting at the polished VC table trying to pitch your start-up.”

Dibner describes the following symptoms of “trench-vision”:

  • It’s hard to see the dream from inside the trench. Dibner stresses the importance of “vision” for VCs and he cautions against getting so buried in the trenches that you can’t see your way out and that you lose the ability to sell others on the dream.
  • VCs are a source of cash. When pitching to investors, make sure your presentation focuses on what you will do with the influx of funding. “if you’re raising a VC-scale round, show me a VC-scale plan.”
  • Don’t forget scalability. Dibner says that while it’s good to be able to demonstrate that your startup has successfully won over early customers, you want to show investors how you plan to continue to grow and scale. “In bootstrap mode, the most pressing goal is often survival which means managing cash flow. In VC-backed mode, the most important objective is usually growth, which means focusing on scalability in all its aspects: market fit, product, technology, sales, team, etc.”

Bootstrapping your company requires great focus and effort. And while your time in the bootstrapping trenches may serve you well, as Dibner cautions, be sure to adjust that focus when you’re ready to meet with investors.

Photo credits: Flickr user WhitA

About ReadWrite’s Editorial Process

The ReadWrite Editorial policy involves closely monitoring the tech industry for major developments, new product launches, AI breakthroughs, video game releases and other newsworthy events. Editors assign relevant stories to staff writers or freelance contributors with expertise in each particular topic area. Before publication, articles go through a rigorous round of editing for accuracy, clarity, and to ensure adherence to ReadWrite's style guidelines.

Get the biggest tech headlines of the day delivered to your inbox

    By signing up, you agree to our Terms and Privacy Policy. Unsubscribe anytime.

    Tech News

    Explore the latest in tech with our Tech News. We cut through the noise for concise, relevant updates, keeping you informed about the rapidly evolving tech landscape with curated content that separates signal from noise.

    In-Depth Tech Stories

    Explore tech impact in In-Depth Stories. Narrative data journalism offers comprehensive analyses, revealing stories behind data. Understand industry trends for a deeper perspective on tech's intricate relationships with society.

    Expert Reviews

    Empower decisions with Expert Reviews, merging industry expertise and insightful analysis. Delve into tech intricacies, get the best deals, and stay ahead with our trustworthy guide to navigating the ever-changing tech market.