Ever heard of great ideas that were bootstrapped to multi-million dollar companies? This article is meant to get you over the notion that you necessarily need external funding by Angels or Venture Capitalists to build a business that rakes in the six figure annual revenue you have always dreamt of.
“Look at what the top stories are, and they’re all about raising money, how many employees they have, and these are metrics that don’t matter,” – 37Signals founder, Jason Fried says. “What matters is: are you profitable? Are you building something great? Are you taking care of your people? Are you treating your customers well?
Seeking funding and/or taking out loans aren’t the only ways to guarantee success in start-up companies. Many successful small businesses have bootstrapped themselves to success, without being dependent on venture capitalists, angel investors or banks.
Here are some companies that have been successful with this approach. You will find many others as well.
1. 37 Signals decided to stay lean and bootstrap the company they started over ten years ago. Today, their products are being used by over 3 million people worldwide.
2. In June 2006, PlentyOfFish was earning $10,000 per day from Google Adsense (around $3.5 M per annum).
3. In 2007, ReadWriteWeb wrote that the one-person company might be worth $1 billion. After that, Frind began hiring a team, but he grew his site to hundreds of million in revenues, investor-free.
4. Gawker bootstrapped and is worth an estimated $150 million.
We highly recommend bootstrapping if you are planning on starting a business. It gives you control over your idea and help you to think of ways to make money, without having to rely on inconsistent financial sources. I’m not sure where the philosophy of not using your own money to start a business came from, but very few people I know who think like this have been any good at growing their profits. They are too busy looking for someone else’s money. Debt can be an abusive companion.
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