Bootstrapping vs. Capital or Equity Injections - GoFuckYourself.com

beks001 · 09-22-2012, 10:05 AM

What way do you prefer or think is best to operate? Hypothetical, let's say you have an idea. Startup costs less than 50-100k. Do you go balls out and back yourself through debt on CCs and other expensive interest modes or do you give up a piece of the pie?

Let's say you currently have 10k to work with as a hypothetical.

Sly · 09-22-2012, 10:10 AM

I like balls out.

You are up against the wall. You have no choice but to succeed.

Other people's money. You can lose it and not care.

Barefootsies · 09-22-2012, 10:14 AM

I prefer to live and die on my own sword.

Often times "investors" are not going to have the industry knowledge you do. They see everything black and white by the numbers. When you're self employed, or have "your balls out"... there is an element of calculated risk you need to account for. Often times, this can create tension.

Having an investor is a lot like answering to a boss. If you're going into business with someone, you want to make sure you both have a few bucks to your name, and are on the same page for the business plan. Otherwise, you will have endless grief.

DamageX · 09-22-2012, 10:17 AM

Operating on a shoe string budget can be very stressful. If you CAN get investors, it can buy you resources that would enable your project to take off much faster than it would otherwise.

Barefootsies · 09-22-2012, 10:19 AM

Quote:

Originally Posted by DamageX

Operating on a shoe string budget can be very stressful. If you CAN get investors, it can buy you resources that would enable your project to take off much faster than it would otherwise.

Correct. But you then must answer to investors/business partner.

Essentially, you're just trading off one stress for another at the end of the day.

DamageX · 09-22-2012, 11:50 AM

Quote:

Originally Posted by Barefootsies

Correct. But you then must answer to investors/business partner.

Essentially, you're just trading off one stress for another at the end of the day.

Thing is, depending on the kind of investors you bring on board, you may well be a lot less stressed. Investors tend to think long-term, whereas you are usually under time pressure to make back your cash and go into positive cash-flow. So if an investor isn't looking for break-even until after 18-24 months, and thereafter for no more than 20% yearly ROI, you're good. With your own money, you need to break even fast and make it into positive cash-flow, because, well... You need to eat.

Major (Tom) · 09-22-2012, 11:58 AM

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livexxx · 09-22-2012, 06:27 PM

turnover is vanity, profit is sanity

Socks · 09-22-2012, 09:29 PM

1. Never use your family's money or borrow from a relative
2. Never borrow money from someone who can't afford to easily lose everything
3. Try to find someone who brings more than money to the table
4. Don't have an investor unless you have to
5. Capital is best for accelerating a business you know is profitable but needs capital to scale.

09-22-2012, 10:05 AM	#1
beks001 Confirmed User Join Date: Oct 2006 Posts: 1,837	Bootstrapping vs. Capital or Equity Injections What way do you prefer or think is best to operate? Hypothetical, let's say you have an idea. Startup costs less than 50-100k. Do you go balls out and back yourself through debt on CCs and other expensive interest modes or do you give up a piece of the pie? Let's say you currently have 10k to work with as a hypothetical.

09-22-2012, 10:10 AM	#2
Sly Let's do some business! Industry Role: Join Date: Sep 2004 Location: Austin, TX Posts: 31,323	I like balls out. You are up against the wall. You have no choice but to succeed. Other people's money. You can lose it and not care. __________________ Vacares - Web Hosting, Domains, O365, Security & More - Paxum and BTC Accepted Windows VPS now available Great for TSS, Nifty Stats, remote work, virtual assistants, etc. Click here for more details.

09-22-2012, 10:14 AM	#3
Barefootsies Choice is an Illusion Industry Role: Join Date: Feb 2005 Location: Land of Obama Posts: 42,635	I prefer to live and die on my own sword. Often times "investors" are not going to have the industry knowledge you do. They see everything black and white by the numbers. When you're self employed, or have "your balls out"... there is an element of calculated risk you need to account for. Often times, this can create tension. Having an investor is a lot like answering to a boss. If you're going into business with someone, you want to make sure you both have a few bucks to your name, and are on the same page for the business plan. Otherwise, you will have endless grief. __________________ Should You Email Your Members? Link1 \| Link2 \| Link3 Enough Said. "Would you rather live like a king for a year or like a prince forever?"

09-22-2012, 10:17 AM	#4
DamageX Marketing & Strategy Industry Role: Join Date: Jun 2001 Location: Former nomad Posts: 14,293	Operating on a shoe string budget can be very stressful. If you CAN get investors, it can buy you resources that would enable your project to take off much faster than it would otherwise. __________________ Whitehat is for chumps If you don't do it, somebody else will - true story!

09-22-2012, 11:58 AM	#7
Major (Tom) Noticing Industry Role: Join Date: Nov 2003 Location: Null Posts: 30,196	I started Duke Dollars with a 10k cash advance on my discover card. it's been doing 7 figs net for 6 years now. My first several porn scenes were in my moms basement. I litterally was the typical webmaster sterotype. Just believe in yourself & that's that. ds __________________ My mother said, to get things done You'd better not mess with Major Tom

09-22-2012, 06:27 PM	#8
livexxx Confirmed User Industry Role: Join Date: May 2005 Location: UK Posts: 1,201	turnover is vanity, profit is sanity __________________ http://www.webcamalerts.com for auto tweets for web cam operators

09-22-2012, 09:29 PM	#9
Socks Confirmed User Industry Role: Join Date: May 2002 Location: Toronto Posts: 8,475	1. Never use your family's money or borrow from a relative 2. Never borrow money from someone who can't afford to easily lose everything 3. Try to find someone who brings more than money to the table 4. Don't have an investor unless you have to 5. Capital is best for accelerating a business you know is profitable but needs capital to scale.