Boston ENET - Bootstrapping 101: Alternative Ways to fund a Startup without an Angel or VC
When: Tue November 13, 2012 7:00 pm
Organization: Boston ENET
Location: Emerging Enterprise Center at Foley Hoag, 1000 Winter St. Suite 4000, Waltham, MA.
Entrepreneurs often think that the only way to grow their business
is to raise capital from VCs or angel investors. While outside capital
can fuel growth, it also carries a considerable cost in terms of time
expended, loss of equity and loss of control. These costs can be, and
often are, avoided by knowledgeable entrepreneurs.
Surveys indicate that, of the 543,000 new businesses created in the
U.S during the year 2011, only 29,626 (that is, only 5%) received VC or
angel investor funding at the seed or early stage startup phase.
And for many companies, lack of VC or angel investment did not impede growth. In August 2012, Inc.
Magazine published its list of the 500 Fastest Growing Private
Companies in the U.S., and 77% of the founders of those companies set up
using only their own personal savings, with two thirds needing less
than $100,000 to get started. And while 34% stated that access to
external capital has been essential for growth, 42% have not utilized
external funding in developing their business. Seventy four percent
have financed their growth over the past three years largely through
cash flow from operations.
So, how do you do it? In a word – Bootstrapping. That is - using
your own resources and effectively managing your cash flow to internally
generate the funds that you need to operate your startup business.
On October 2nd ENET will devote the evening to “Bootstrapping 101” to discuss a series of topics that will include:
- Buying used, using eBay and craigslist and controlling your costs,
- Hiring part-time, interns and volunteer help,
- Using equity effectively and outsourcing for expertise,
- Using barter, free resources, and building and using your network,
- Testing small and adapting quick,
- Keeping the day job or consulting to fund the business,
- Leveraging relationships including advances from customers and partners.
Apple, Google and HP all began in garages with free rent and we
will hear from three experienced CEOs who have also built their business
by bootstrapping without VC or angel investment until they achieved
important milestones and were well on their away. In some cases, they
went all the way through to a successful acquisition exit without
Karl Büttner, Chief Mentorship Officer, with the Startup competition and incubator Mass Challenge
With over 20 years of both bootstrapping and VC-backed company
experience, Karl is passionate about supporting entrepreneurs. Karl
co-founded 170 Systems, an enterprise software company in 1990, and saw
it through two decades of growth and profitability, culminating in a
successful acquisition. Karl led the company as CEO as it bootstrapped
to become a profitable, worldwide market leader with a Fortune 1000
customer base using the company’s software products and services in over
90 countries – all before taking VC funding which fueled further
growth. After joining MassChallenge in its inaugural year as a judge and
mentor to many teams, Karl is now focused full-time on making the
mentorship experience the best it can be for both the emerging companies
and the participating community. Karl is also a mentor with programs
such as TechStars and the MIT Venture Mentoring Service. Karl received
his bachelor’s degree in electrical engineering and computer science
from MIT, and lives with his wife and two sons in the Boston area.
BarryMorris, CEO, NuoDB Inc
, a 21st century database that addresses the challenge of web-scale applications for the cloud.
Barry is an accomplished software CEO with over 25 years of
industry experience in the USA and Europe, running private and public
companies ranging in scale from early startup phase to 1,000+ employees.
He loves to build companies around industry-changing paradigm-shifts in
technology. Barry joined IONA Technologies (NASDAQ:IONA) in the very
early days and ultimately as CEO led Ireland's most successful software
company through its strongest period of growth, all completely
bootstrapped. Later, as Chairman and CEO of StreamBase Systems, Barry
took an MIT project and built it into the market pioneer and leader in
Complex Event Processing . In addition to great deal of consulting work
over the years he has served on the boards of many startup companies in
Boston, Ireland and South Africa. He has a Degree in Engineering from
New College Oxford University, and an Honorary Doctorate in Business
Administration (DBA) from the IMCA.
Erica Zidel, founder and CEO of Sitting Around
, an online community that makes it easy for parents to find and coordinate babysitting co-ops in their neighborhoods.
Completely bootstrapped, Sitting Around serves families in 48
states, as well as in Canada, Australia, Hong Kong and the U.K.
Boston-based, its website has a user base toover 7,000 families on the
site and 1,500 registered sitters. The mother of a young child herself,
Erica knows all too well the challenges parents today face, especially
when it comes to finding great babysitters. Ever the entrepreneur, Erica
launched her first business at age 7, a moderately successful jewelry
stand that employed all her friends (and sold exclusively to said
friends' parents). Prior to founding Sitting Around, Erica worked as a
management consultant advising Fortune 500 companies on eCommerce and
business strategy. Erica holds a B.A. in English from Harvard College.
Robert Adelson, business and tax attorney and partner at the Boston law firm of Engel & Schultz LLP
), and Chairman of IEEE Boston Entrepreneurs’ Network (ENET).
Rob has been an attorney for over 30 years specialized in business,
tax, stock and options, employment, contracts, financings and
intellectual property. Rob began his legal career as an associate at
major New York law firms Dewey Ballantine and later Weil Gotshal &
Manges, before returning home to Boston in 1985 where he has since been a
partner in small and medium sized firms before joining his present firm
in 2004. Robrepresents entrepreneurs, start-ups and small companies,
independent contractors and employees and executives. His main practice
areas are: Business formation, allocation of equity and angel and VC
finance; Commercial contracts, licensing, alliances; Executive
employment, stock, options and severance; Trademarks, copyrights, trade
secrets; M&A. Rob is a frequent speaker on business law topics and
author of numerous articles published in Boston Business Journal, Mass High Tech
and other publications. Rob has been on the ENET Board since 2002 and
Chairman since 2009 and is also aBoard member of the 128 Innovation
Capital Group. He holds degrees from Boston University, B.A., summa cum laude, Northwestern University (Chicago), J.D., Law Review, and New York University, LL.M. in Taxation.