Raising Money In Tough Times: An Entrepreneur's Guide to Bootstrapping

Overview: As many entrepreneurs and leaders of emerging growth companies know, the capital markets have been weak for nearly three years, making it very difficult to raise the resources needed for continued growth. The few companies that have been fortunate enough to raise money during these tough times have demonstrated all the following characteristics, and even they haven't all been able to close new rounds. Nonetheless, the traits include the following: Strong team, Concise game plan, Clearly defined market etc. For everyone else, there is bootstrapping. Entrepreneurs who have not been able to meet the above standards have been forced to survive via this tried and true technique. Bootstrapping is the art of learning to do more with less. A company that is started and built around a culture of bootstrap management understands that all resources are scarce and that cash must be cherished. "Cash is king" becomes the mantra. The bootstrapper must distinguish between costs that can be avoided, like lavish office space, and those that are necessary to build a foundation for growth, such as the proper computer systems. The effective bootstrapper also understands the concept of "equity for services." Bootstrappers understand that they must be creative and aggressive in their cash-management techniques and in their quest for necessary resources.

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Format: HTML | Date: Jan 2003 | Pages: 1