Why I am choosing bootstrapping vs seeking for VC funding.

This is will be my first blog if I post it, so I apologize in advance for it’s structure and readability since I haven’t written a damn paragraph in ages.

Also this is a completely unscientific personal experience. The comparison made here is completely qualitative, not quantitative. If you were looking for actual comparison between bootstrapping businesses and raising money to scale you business, well… this isn’t the right place.

So, after going about things in the startup world like most people advise you to, that is trying to get VC funding and scale your business, I have finally decided I want to start smaller and bootstrap side projects into startups.

I am 23 years old, from Greece and just graduated with my Computer Science degree. While studying computer science I always read about all these “success stories” of young computer scientists raising money and going full steam for the top! I even had a ‘close’ acquaintance of mine, also Greek, that went to SF, founded a Big Data company and raised money from top-tier investment funds like Andreessen Horowitz, so as you can imagine, I WAS HOOKED.

All I wanted to do is come up with the next big thing. Raise money, scale, be a multi-millionaire, young, rich, sexy and live the dream by the time I am 25, maybe 30 being humble. Once I had that I would be happy.

I started a social app while I was a student, one where you could see what is happening right now at the cafes, bars and nightclubs of your area and decide easier where to go out. On the other hand, cafe/bar/nightclub owners, could upload images, video and additional information and advertise their business for free at a very targeted audience.

I knew that I would need capital to scale out of my city but I was ok with starting smaller. Also, I knew that indirect competition with Instagram Stories, Facebook events etc was through the roof but I was ok with taking my chances because I believed in the idea. So I applied to join an incubator.

I was accepted into the incubator and at the moment I am in the final month of the three-month program. What really struck to me is that from the first day we were talking about investment and about being investment-ready when most of us where very early stage startups and even idea-phase startups.

Ok, I understand that it works both ways, meaning that if you understand what a investor is looking for, you can be able to see what makes a great company with high potential and try to implement it in your company.

Or maybe not?

Investors represent a small partition of a greater investment portfolio. They represent the “Ultra High Risk” part of the portfolio. So, as you can imagine, investors’ jobs is not to look for a ‘safe’ bet but swing for the fences, trying to find the next unicorn. Their goal is one ‘unicorn’ in every 100 investments.

Now, that got me thinking really hard. Why would I want to morph my business and beliefs and try to look like a unicorn so some investor comes and invests in my company? Also he will most likely change my business plan in order to maximize growth and I will have to live under the pressure and stress of following up with my “Break Even” and x10 your money promises!

I went back and had a look at the ‘success stories’ stats and you can clearly see that seed investment or even series A funding still gets you to a 1/100 chance of building a profitable and sustainable business that is in for the long run. My numbers might be a little off but you get the picture. Even that acquaintance of mine that raised all those millions never made it to series A. He bootstrapped his second startup from Greece. Also, I expressed my concern at the incubator I am attending and one of the coaches there told me in private that he agrees with me and that is what he is doing now also, bootstrapping his startup now. He had raised about a million dollars scaling a software startup he had with offices in Greece and London. He told me he hadn’t slept for three years. His investors put the pressure on him, changed his business plan and made his life hell.

All I can say is that I don’t want to play part in this game investors and wannabe/maybe future ‘Zucks’ are playing. I am not going to try to build the next Facebook or Instagram and I am for sure not going to try to compete with them like I wanted to with my first app.\

It really comes down to what you want in life. I am a very humble being, I am actually ok with having a $5 million dollar business and having all the cheese for myself. Haha. All jokes aside, I want financial freedom, not having to answer to anyone and being free location-wise, no offices, solo or with a fully remote team.

I am going to start small, with profitability in mind from day one and by all means build ideas that don’t need capital in order to scale.

My goal is to do one project/startup a month. About two weeks building the MVP and about two weeks marketing, running it and automating nearly all if not all the processes so it can run on it’s own. Then decide either to ditch it or focus.

I hope this wasn’t too hard to read, feedback is more than welcome. :)

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