Let’s say you have a great idea for a startup and you have the ambition of building a billion dollar company — a Unicorn. Should you immediately quit your job and jump in with both feet?
Or should you bootstrap this idea with a paycheck to validation? May be to profitability? Is it even possible to bootstrap a Unicorn startup with a paycheck? Has anyone ever bootstrapped a Unicorn with a paycheck?
Let’s say you have a great idea for a startup and you have the ambition of building a billion dollar company — a Unicorn. Should you look for investors?
Or should you bootstrap this idea to profitability? Is it even possible to bootstrap a Unicorn startup? Has anyone ever bootstrapped one?
I suggest you start by bootstrapping your idea.
That would give you options: you can either bootstrap all the way, or bootstrap first, validate, raise money later. Investors tend to chase validated businesses.
Here is an example of a bootstrapped Unicorn in this 56 second video. Investors have chased this entrepreneur for years and years and years.
Let’s say you want to build a great tech company. Should you start by moving to Silicon Valley? Or, can you do it from right where you are, right from your own hometown?
I suggest start validating your idea and building from right where you are. Today, it is no longer necessary for ambitious entrepreneurs to be in Silicon Valley. Great tech companies, even billion dollar Unicorns, can be built from anywhere.
Today, Silicon Valley outsiders can knock over their Silicon Valley competition with proper knowledge, precise strategy. Knowledge will always win over location.
This 1 minute 34 second video proves my point. Have a look.
There are always competitors who have been longer in the game and who are better funded. But it doesn’t mean they will be the winners in the marathon.
A startup is a marathon, not a sprint.
Gobs of VC money never guarantees a startup’s success. A nimble upstart can beat a well funded competitor with a superior strategy.
Here’s a 1 minute 21 second video that explains further:
Raising money too soon for a startup creates a number of serious problems.
You get diluted out of your ownership.
You destroy your cap table and follow-on funding becomes complicated to negotiate.
Watch this 2 minute 20 second video to learn how Mark Zuckerberg played the funding game and preserved 26% equity in Facebook.
We’ve talked extensively about the alarmingly low probability of getting a startup funded in this video:
We’ve also said that you CAN dramatically increase your odds if you Bootstrap First, Raise Money Later.
Now, watch this 1 minute 41 sec video to learn more about how to improve the odds of getting your startup funded.
YCombinator rejects 97.15% of all applications.
Is there a strategy for raising your odds of getting into YCombinator?
The short answer is yes.
Watch this 2 minutes 11 second video on how Jas Grewal, CEO of CareSkore did it.
Funding = Success, right? I wish it did. But entrepreneurial tracks are littered with carcasses of dead startups that were very well funded, some to the tune of hundreds of millions. As a case in point, watch this 2 minutes 31 second video: Death By Overfunding.