You want to take your brilliant idea to the next level but it requires time and money to grow. Do you bootstrap and grow organically or take on investment and accelerate progress? Bootstrapping your company means doing more with less and potentially delaying financial rewards but leaves you with more ownership and control. Taking investment can speed growth, attract talented employees, and help you stay competitive but means giving up equity and some control. Learn the pros and cons of each approach and which is best for you.

1. Should You Bootstrap Your Business or
Take on Investors?
Presenter: Holly Hamann
Co-founder, TapInfluence
@hollyhamann

2. “Entrepreneurship requires
balancing unbridled optimism with
delusional foolishness”
TechCrunch
@hollyhamann

3. 4 Ways To Fund
1. Self-fund
2. Family and Friends
3. Angel investors (and
incubators)
4. Venture Capital
@hollyhamann

4. Investment is like dating
1. Develop pitch
2. Target VCs
3. Build relationship
4. Negotiate terms
5. Valuation
6. Due diligence
7. Seal the deal
@hollyhamann

5. If you take on formal investors,
you are expected to sell the
company or IPO.
@hollyhamann

6. 1% of start-ups get funded
@hollyhamann

7. Bootstrapping
Pro’s
• Control
• Ownership
• No pressure to exit
• No BOD
Cons
• Typically funded with job income
• Harder to pivot
• Alone in decision-making
• Harder to attract talent
• No lifeline
@hollyhamann

8. Angels
Pro’s
• Industry expertise
• Smaller rounds
• They have skin in the game
• Typically have been entrepreneurs
themselves
• More tolerant of risks
• Easier to find than VCs
• May support smaller exits
Cons
• Smaller rounds
• Can be high-maintenance
• Rarely make follow-on investments
• Expect exit
@hollyhamann

9. Venture Capital
Pro’s
• Help with decision-making
• Larger rounds
• Lifeline
• More likely to do follow-on rounds
• Hiring connections
Cons
• More money = more problems
• Better at negotiating than you
• Loss of control
• Lengthy process
• Expect exit within 10 years
@hollyhamann

10. Three Things Investors Look For
Angel / Incubators VCs
Market OK if market is unproven but • Big returns ($100s of millions)
need to prove market within a • Rapidly growing user base
few months
Team Typically includes someone • Need to be “backable”
they know • Seasoned executives
Technology Typically an area they are • Non-trivial technology
familiar with • Entry barrier (too hard for
others to do on their own)
@hollyhamann

11. What’s Right For You?
• How much do you really need?
• What is best case revenue scenario?
• Are you in a rapidly-changing industry?
• How many years do you want to invest?
• How much $$ do your competitors have?
• Can you motivate others without salaries
and equity?
• Do you want to keep your company
forever?
@hollyhamann

12. Resources – Books and Blogs
Mark Suster, Both Sides of the Table
Ben Horowitz, Bens Blog
Paul Graham Essays
Fred Wilson, AVC
Brad Feld, Feld Thoughts
Nivi and Naval, Venture Hacks
Foundry Group, Ask The VC
@hollyhamann