This quote came from a book about bootstrapping. The advice is to bootstrap as long as you can for two reasons. First, the closer you get to selling your product, the more value you create in your startup and the less equity it will cost you should you decide to take on venture capital. Second, when you take on investors, you take on partners who have a say in how the business is run.
As CEO, you are accountable to keeping your investors informed and you will have milestones to accomplish in order to continue receiving their money.
So let’s be clear about investment capital – it buys you time. When you are ready to scale and really launch your product across your market, it takes a lot of money. National campaigns are very expensive. Sure you could grow incrementally through social networks and word of mouth but it takes months and years to get a large following.
Using other people’s money buys you that time but there’s a cost. You share ownership and a Board of Directors who can decide to fire the CEO.
How important is your ego to you?
Blogging Gazelle is published daily by Shawn Carson