Reasons for revolution

Filed in archive Philosophy on September 10, 2007

A couple of days ago when posting a new mission statement here at BootStrapMe.com, I referred to this site as more of a revolution than a blog.

A similar revolutionary tone was certainly struck in the intro for our newly launched Yahoo! site the Bootstrapper's Group which I'm hoping will continue to gain membership and momentum.

If the bootstrapping startup, funding a company with little or no outside investment, as opposed to the fund raising approach to launching a venture is truly revolutionary than I think it is a revolution whose time has come.

Here are five reasons why:

1. Everybody's doing it. In fact, Montana-based bootstrapper Greg Gianforte estimates less than one percent of all startups get Venture Capital funding and the rest are launched with $20,000 or less. Bootstrapping or at least startup with limited capital investment is already a fact in the real business world even if the myth of big backers is still propagated in business schools, chambers of commerce and even in government.

2. Small is the new big. A gander at the size and earning limits of some businesses still regarded as "small" in the SBA's "Table of Small Business Size Standards" gives some idea of the distorted perspective of the agency toward the small business community and an article at CNN Money reports SBA loans reach less than 1 percent of U.S. small business. It's time to promote a better, more sound funding option.

3. Where have all the VC's gone. VC's themselves may be an endangered species if the cost of technology startups in particular stays low as this post followed by one here at BootStrapMe tends to suggest.

4. Funding Catch-22. Like the infamous regulation that plagued war wearied military personnel in Joseph Heller's novel, the VC funding system itself may create a sort of no win scenario for some entrepreneurs according to this post by blogger and consultant Tim Berry. One of his solutions? Bootstrapping!

5. What will they think of us? The most compelling reason for changing the conventional wisdom on startup of new ventures is a partially unselfish one. As Gianforte explains:

Somehow, we've developed a business culture that believes business is more about borrowing money than making it. The fruit of this culture includes high-profile corporate failures, a new wave of burdensome regulation, and public mistrust of the business community.

This last item is particularly troubling. We simply can't afford to have business cast in a negative light. The economy of our country depends on the next generation of young people initiating the next generation of business start-ups. For that to happen, we need to let them know that starting a business is a worthwhile thing to do with your life-and we need to teach them the best way to do it. Bootstrapping needs to take its rightful place in our schools and in our media.