Bootstrapping can be route to funding

Filed in archive Bootstrapper News on April 12, 2008

While some entrepreneurs may be happy to bootstrap their companies indefinitely as the best way to launch, grow and maintain control of their ventures, others may choose it as a route to outside funding in the future.

Investors still have plenty of money to sink into startups, about $58.5 billion in the U.S. in 2008 according to this article from the Arizona Republic via azcentral.com compared with $44.3 billion in private equity during the same quarter last year.

However, experts also say those investors prefer a track record something creating a "Catch-22" for many startups with no solid history of success.

Entrepreneur Neeley Neal, founder of Sideline Star LLC, an online social network for people in the cheerleading industry, explained the quandary this way.

"I think there is sort of this hurdle," Neal said. "You have to either bootstrap and show some success on a shoestring budget or . . . find the larger firms that are willing to invest $1 (million) to $2 million."

Photo Credit: Prisonbreak, Morguefile