The Startup Therapy Couch™: Critical Factors for Startup Success - #4 Bootstrap

In this series, we're diving into the most critical factors for startup success. These are the criteria that most often are present when a startup "makes it".

The fourth critical success factor for any startup is BOOTSTRAP! Bootstrapping means going as far as you possibly can, getting as creative as possible along the way, before you take money from other people and give away equity in your company.

There are two reasons why this is important:

1- Raising money too soon in your startup process may mean that you waste a bunch of it figuring out what you're really doing. The consequence of that could be that later when you go to raise more money, investors aren't as keen on you because you didn't show promised results or milestones with your early raise.

2- You give away more of your company when you raise money early! You should be working towards getting as close to revenue as you possibly can before raising money so that you give away less because you have more proven value in your idea.

Bootstrapping might look like borrowing money against your house, credit cards, or personal loans; possibly getting some small business loans; or maybe even borrowing from friends and family in small amounts. But most of all it involves sweat equity from you and your partners, co-founders or equity-for-hire players. You should get your head around not making a salary for your work until you hit revenue. It won't always go that way, because many times investors are willing to have founders pay themselves something out of raised capital. But if you have your head in the game towards that goal, you're ahead of 99% of the pack.

Ready? Set? BOOTSTRAP!