Not every upcoming startup is looking for some investor to offer their idea funding wrapped in trust.
Some entrepreneurs start a venture with their own money. It can be their savings or family money they put in their business. The business that gets started without any external help or cash is called Bootstrapping.
As much as an idea is important, money is important. You might or might not have enough money in the beginning. Putting in your own money has got both pros and cons. To discuss a few, they are:
THE GOOD POINTS
You are answerable to yourself
The investors always have some interests, drive and objective behind investing in a venture. In addition, they ask for their share of equity. When your area of interest clash with theirs, the smooth running of the company becomes challenging. But when you are self-funded, you are no longer answerable to anyone.
One single focus
Now when you are solely taking care of the operations and the funding, you can focus on better on your personal goals that you have set. The external influences distract you from your centre of attraction impacting the quality of your work, productivity and competence.
Innovation and improvement
It’s natural that you get more creative with your work and product improvement when it’s your money that is on the stake. You invent, reinvent and keep improvising till you are satisfied to launch it in the market.
Responsibility and Accountability
If there something that’s yours, you take care of it better. If the business and investment
THE BAD POINTS
It’s never easy to generate returns on your investment. Attaining breaking itself takes a couple of years at least. You need to be patient with your business and chalk out a plan that works and makes the venture profitable.
Only money will not solve all the purposes. There are certain factors and areas to be worked on to develop a company. You need to spend on research & development, recruitment, marketing and operations to expand and achieve the desired objective.
Contacts, connections and networking
Contacts are always the best leads. More than what you know, sometimes it is about who you know.
You can never guess who turns out to be just the right person for your business and whose word of mouth becomes the best marketing. Going to the market and creating contacts gives you more visibility.
A company is known to be more trusted if they have an outside investment because this acts like a proof that you are trusted in the market. It is like a credible source vouching for your genuineness and sincerity.
Outside funding is definitely important to support