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.

Website: http://boston-enet.org/meetings/bootstrapping-101-alternative-ways-fund-startup-without-angel-or-vc

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 external funding.
 
Panel
 
Karl Büttner, Chief Mentorship Officer, with the Startup competition and incubator Mass Challenge
, www.masschallenge.org.
 
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
., www.nuodb.com, 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.
 
 
 
E
rica Zidel, founder and CEO of Sitting Around, www.sittingaround.com , 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.
 
Moderator
 
 Robert Adelson, business and tax attorney and partner at the Boston law firm of Engel & Schultz LLP
(www.engelschultz.com ), 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.