Bootstrap or raise funding? A framework for your startup
Manage episode 427498136 series 3237949
Founders are often confused whether to bootstrap or raise funding?
First of all, there is no right or wrong answers here.
"What'ever floats your boat" is a generic advice, but there has to be a better framework for founders to make a well-informed decision.
At scale (say $100mn+ revenue or Series D onwards_, startups are all about 2 things
Control
i.e. ability to control your decisions, your destiny, your path. Given the gen AI world we live in where companies are getting disrupted with each and every new model launch, you need to have a lot of control on your decision making. This also helps you move fast, take quick decisions and not be at the mercy of your competition’s agility.Growth
Of course, nobody wakes up saying ‘I want to build a slow growth business’. We all want high growth business - but here is the reality: growth comes at a cost. And we all have seen what happened to those high-growth businesses of 21,22 (ZIRP era). They don’t even have money to pay salaries to their employees. Founders are left with neither growth nor control of their business.
So what’s the right framework to look at this dilemma? Enters 2 by 2 :)
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