How you fund your startup directly impacts how you operate and grow. Many founders believe that venture capital is vital to the success of their early-stage startups. It’s become, in many ways, a badge of honor for entrepreneurs with an idea.
VCs can reorient tech leaders away from their primary mission and core growth philosophies, pushing them to hyper-fixate on investor preferences and profit. This shift can lead to financial decisions being made over business decisions. This was certainly true for Casepoint, which was founded in 2008 with friends, family and some small angel investments and grew organically. Over time, as the business became profitable, the need to bring on a VC diminished. This allowed us the autonomy to build a business with intrinsic value through methodical product development and by delivering a superior customer experience.
Without venture, startups have time and autonomy to figure it out—to explore what the company could be and where true product fit lies. It’s in this space that they can reconnect with customers and rebrand for long-term sustainability. Bootstrapped startups can take a second swing at any time because they don’t have to compete with KPIs and ROIs.
Beyond that, self-funded startups can allocate resources to behave like investor-backed companies. They can invest in marketing and PR to grow brand awareness. They can network strategically to get into the right rooms and partnerships. CEOs can build an informal board of advisors through regular conversations with people they trust and respect.As a company evolves, however, raising money might become necessary. When that time comes, companies must thoroughly and methodically assess investors.
Source: News Formal (newsformal.com)
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