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Bootstrap is Your Growth Map

Read time: 2 Minutes

Welcome to David Beats Goliath, where we challenge the Goliaths of conventional thinking.

Bootstrapping instead of Pitching

Bootstrapping refers to starting and growing a business with minimal external funding by using personal savings, reinvesting profits, and relying on resourcefulness and creativity to maintain control and ownership.

It's my preferred method of building a business. 💪

It's also what I recommend other entrepreneurs to do. 👍

"But why bootstrap when you can build with investor money?"

The VC Trap

The only businesses that should be raising VC money are startups that are (or will be) growing SUPER FAST.

How fast is SUPER FAST? 💨

Depends.

But here's a metric used in Silicon Valley for unicorn speed (i.e., privately held startups valued at over $1 billion):

You get 7 years to grow your revenue...

• 3x within year 1
• 3x within year 2
• 3x within year 3
• 3x within year 4
• 2x within year 5
• 2x within year 6
• 2x within year 7

Let's play this out with actual dollar figures:

• Year 1-2: Triple
  • Initial Revenue: $1 million
  • After Year 1: $1 million * 3 = $3 million
  • After Year 2: $3 million * 3 = $9 million
• Year 3-4: Triple
  • After Year 3: $9 million * 3 = $27 million
  • After Year 4: $27 million * 3 = $81 million
• Year 5-7: Double
  • After Year 5: $81 million * 2 = $162 million
  • After Year 6: $162 million * 2 = $324 million
  • After Year 7: $324 million * 2 = $648 million

In short, unless you're on track to achieve this type of revenue growth, many by-the-books VCs in Silicon Valley won't consider your startup a worthwhile investment. 😬 😳 🤯

The High-Stakes Game of VC Funding

In reality, most startups can't grow that fast.

Taking VC money could mean you're entering a blood bath of a rat race.

If you can't grow significantly within the first 18-24 months of taking VC money, your precious startup just might get crushed out of existence.

Bootstrapping is More Natural

Unicorns aren't natural. They are mythic.

I don't think it's healthy for every entrepreneur to chase unicorn status—it's like every teenager aspiring to become a super influencer.

It's lopsided and unnatural.

Bootstrapping, on the other hand, fosters a culture of creativity and resilience by maintaining control and encouraging steady, manageable growth.

It leads to a more stable and fulfilling entrepreneurial journey, with success measured by long-term impact and self-sufficiency rather than just achieving a billion-dollar valuation.

Have You Met Blaine?

Blaine Vess exited his startup, Student Brand, for $58.5M!

I first met Blaine about two years ago at a charity dinner. We hit it off instantly, bonding over our shared interests in education, Korea, and startups.

Blaine bootstrapped his startup ALL the way for 17 years!

And he enjoyed every step of the way.

If you ever have the pleasure of speaking with him, he'll tell you straight up: "Bootstrapping is the way to go!"