Read Time: 8 minutes
Tech Topics In This Article: bootstrapping, founder advice
The number of new businesses and startup applications has soared since the height of the COVID-19 pandemic. However, venture capital funding has seen a significant decline in the last year, forcing many startups to navigate tighter budgets and find ways to bootstrap their path to success.
That can be difficult in the startup world, where raising venture capital often feels like the ultimate sign of external validation. But a growing number of founders are proving that bootstrapping, or building a business without external funding, isn’t just viable…it can be a strategic advantage.
The reality is that bootstrapping advice can be harder to come by in the venture-focused world of startups. So we spoke with founders from a diverse range of industries about the perks, pitfalls, and practicalities of bootstrapping.
The Bootstrapped Path
Brian Elrod, president and CEO of Text Request, said that while it wasn’t the goal to bootstrap when the startup got off the ground, the team ended up taking that route after failing to get fully committed venture capital rounds. But there was a big silver lining: Text Request had a product out in the market that was attracting customers.
For some founders, bootstrapping wasn’t just a strategy—it was the goal from day one.
“We valued the autonomy that bootstrapping offered—retaining complete ownership and control of the company,” said Atlanta-based entrepreneur Tyler Williams, who co-founded, bootstrapped, and grew MotionArray.com to an exit in 2020. He’s currently bootstrapping Align.io, a feedback app for web development.
“There were definitely moments when raising capital seemed appealing, especially during challenging periods. In the early years, it took about two and a half years before we could leave our full-time jobs and focus solely on the company. During times when growth felt slower than anticipated, the thought of raising money was tempting. However, I’m ultimately grateful we stayed the course and chose not to bring in outside funding. Bootstrapping allowed us to retain full ownership, which, in hindsight, was invaluable.”
Bootstrapping also gives founders flexibility, especially in deep-tech startups where timelines can be unpredictable. Monica Isgut, a graduate of both Emory University and Georgia Tech and co-founder of the drug discovery platform Serac Bio, noted that self-funding allows her team to iterate without the pressure of delivering immediate results.
“Given the deep tech nature of what we are building, it has provided us with the flexibility to test and iterate with the AI/ML models, without a timeline that would otherwise be pre-set by VC or other investors,” Isgut added.
For the team behind the startup Ruddr, deciding to bootstrap was all about understanding the industry they were building in.
“I think the VC vs. Bootstrap decision should be heavily based on the market you are pursuing. If you are an early entrant in a market that is likely to experience exponential growth, bootstrapping is almost certainly a mistake. It would have been a mistake for Facebook, Uber, or OpenAI to bootstrap. At Ruddr, we built a much better product for a very mature global market. It wasn’t a land grab. In that scenario, bootstrapping can be a good option,” Ruddr CEO Rob Patten told Hypepotamus.
The Metrics That Matter To Bootstrapped Founders
When every dollar counts, prioritizing the right metrics can make or break a bootstrapped startup.
For SaaS startups like Atlanta-based SuperCopy.ai, MRR (Monthly Recurring Revenue) remains the north star, but co-founder William King emphasized the importance of user relationships.
“Our network and user base fuel everything we do. We’re constantly checking in on the value we’re delivering to users and ensuring we have enough leads in the pipeline to sustain growth. Being bootstrapped forces (and rewards) a hyper-focus on what pays the bills: USERS,” King told Hypepotamus. “Of course, MRR is the key metric we track to keep the lights on, but relationships are the real driver behind the numbers.”
Richard Schrade, Georgia Tech graduate and co-founder at Automation Intelligence, said his bootstrapped team is closely tracking how leads come in.
“With marketing capital at a premium, we want to make sure that every dollar we spend on client acquisition has evidence to suggest that it’s a sound investment,” Schrade said.
For Oliver Hutchison, student entrepreneur at Emory University who is building Inverted Learning, it is all about measuring progress through targeted outreach.
“Two key metrics I track to measure growth include the number of emails and messages I send weekly to potential team members, advisors, or valuable connections who can offer insights or help expand the venture’s reach as well as the percentage of these outreach attempts that lead to positive responses, including expressions of interest, meaningful conversations, or commitments to join or support the journey. Together, these metrics help gauge the effectiveness of my networking and the alignment of Inverted Learning’s vision with potential collaborators.”
A Slice Of Advice From Fellow Bootstrapped Founders
We asked six bootstrapped entrepreneurs what advice they’d share with others looking to bootstrap. Their nuggets of advice are worth reading over if you are thinking about taking the bootstrapping journey:
1. “You should plan on not making any personal income for the first 2 years of operations. To bootstrap effectively the first good bit of revenue needs to be reinvested back into the business so you can grow as fast as possible. As the founder, you have to sacrifice your income if you want to make it work. And if you have cofounders, they have to sacrifice as well. So, either have enough in your savings to get you by or get a part time job that gives you income you can live off of.” – Ford Coleman, founder at Runway, a platform that connects businesses to entry-level talent for part-time internships, full-time internships, and full-time work for recent graduates.
2. “My advice for bootstrappers is to keep your primary source of income as you build your business. For us, having full-time jobs while developing our product on nights, weekends, and even lunch breaks made all the difference. I remember one instance when I rushed home during my lunch hour to upload a project before returning to work. My recommendation for bootstrapping founders is to grow your business on the side until it’s financially viable to transition full-time. When you’re finally able to commit completely, you’ll likely see a significant uptick in growth and progress.” – Tyler Williams
3. “It is easier to bootstrap if you are building a software-based startup. Ideally, you are in a position where you can fund yourself as you build out the tech – whether through working part-time or full-time while you work on the startup at first, or whether it is through savings while you dedicate most of your time to building the startup. Make sure you have a pathway towards getting revenue organically and keep track of your burn rate to make sure this aligns with your business model (in terms of time it will take to grow your revenue). Know when and at what point it makes sense to seek funding – maybe you’ve bootstrapped for long enough to build initial value, and want to scale up – at this point maybe it is a good idea to consider bringing in investment funding. But it depends on your overall goals and long-term objectives for the company.” – Monica Isgut
4. “ I suggest bootstrapping unless and until you have a good reason not to. It forces you to be efficient and to find your market fit from day one. As co-founders, we answer only to ourselves. We have 0 investors competing for our time and patience.” – Richard Schrade
5. “Embrace the opportunity bootstrapping gives you to be hyper-focused on your users. If someone isn’t willing to pay, adapt your offering—because you can’t afford to stay unpaid! Also, bootstrapping isn’t about doing everything internally. Our early success came from leveraging external partnerships, marketplace deals, and reseller contracts. If we couldn’t build a team in-house, we found the right support elsewhere. Support can also come from accelerator programs like Techstars and ATDC, which Supercopy is proud to be a part of. These programs have been instrumental in providing resources, mentorship, and connections that helped us scale smarter. There are an infinite amount of ways to stay successfully bootstrapped.” – William King
6. “My biggest advice to early-stage founders looking to bootstrap is to intentionally block out dedicated time each day to focus solely on your venture. As a college student juggling a heavy workload, a part-time job, and staying healthy, it can be extremely difficult to find time for your startup. Aside from tending to minor tasks and logistics throughout the day, I carve out one hour every morning before my day begins to work on my venture and as well as another 30 minutes before bed. This focused time allows me to tackle high-priority tasks and keep momentum going. I also use the weekends to get ahead, even if it means sacrificing social time.” – Oliver Hutchison
7. “You’re better off to push off investment as long as you can. But there does come a time when you have to start weighing the benefit of taking an investment. You just have to understand there could be some diminishing returns as far as your ownership and your percentages.” – Brian Elrod
8. “The first piece of advice is to pick an industry and product where bootstrapping is feasible. If you want to build an LLM to compete with ChatGPT or Gemini, do not bootstrap. The second piece of advice is to carve out a niche in a market where you have meaningful domain expertise. Build a product or service that a small cohort of initial customers will absolutely love. Then, stay close to your customers and iterate as quickly as possible. Customer love is the secret. When customers love your product, churn will naturally be low and revenue will compound.” – Rob Patten, Cofounder and CEO at Atlanta-based Ruddr
