How Good Is the Idea of Bootstrapping a Business?

Last week, I was having a telephonic conversation with somebody from one of India's most popular business magazine. The talk was about startups in general and drifted to lack of seed capital for India based startups. One question he asked me was "Would you have taken investment if it was easily available?"

(I am a co-founder of a startup based out of India and have bootstrapped the business using personal funding and by servicing the clients. We, deliberately, haven't tried raising any money so far.)

I said "No" - "I think it's best to bootstrap a business and not go for seed funding if it can be avoided". Of course, there are businesses which cannot be bootstrapped at all but it should be avoided as much as possible.

Let me present my case with the points below:

• It shows your seriousness: The first thing that bootstrapping shows is your seriousness. It is obvious that one is serious when one is venturing out but the stakes are a lot higher in case of bootstrapping. And most people typically perform the best when they feel the need of pushing their limits.
• Controlling your finances: There is a logic in not having the best possible office space or a multi-screen flat panels at your desk. It's the basic human mentality to ask for more with time. So, if somebody is provided a high-profile office with a sea-view in the initial months, it's just natural for them to expect an independent office with even better facilities in the next few months. And all this comes at a cost - that you can minimize when you are still trying to build your revenues and want money for the other things that are more essential for your business.
• It brings more dedication in the team members: As an entrepreneur, the first thing that you want from all the team-members is dedication towards the venture. When you are bootstrapped, you will have facilities which will be far from being world-class. If there are people who join a business knowing this fact and remain loyal to the company, it shows a lot of dedication in them. It is this dedication which pays off when you are trying to walk a path, which is not that common.
• More control over your business: Of course, if nobody but the people who are actively involved with the company are the ones who make the decisions, everybody feels more comfortable. I am not against investment (I believe that one should go for investment after a certain stage for a variety of reasons) but the longer you delay it, the more time you get to do things 'your way'.
• Helps refine your business model: Typically, an idea undergoes a lot of changes as it gets converted to execution. And this happens more frequently in the initial period - so it's better to refine the idea and business model when you have more control.
• More fun: The best result of doing things our own way is the fun that comes with it. You don't have a god-father even though you will have advisors, you don't have somebody to constantly help you in all your decisions - that makes you more independent, makes you learn more and, consequentally, enjoy more. What is life if the work you are doing remains a work and not fun?

Having said all that I said above, I will quickly mention that there are some minuses also, but I am an ardent fan of boot-strapping a business and it has worked pretty well for us so far.