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Thinking of starting your own company? Already started it? These are the two questions that opened the Denver Startup Week‘s panel on the tough, tricky, and often necessary tactic of bootstrapping. The three panelists included Mike Freeman, CEO at Innosphere, Colorado’s leading technology incubator; Tynan Szvetecz, founder and CEO at Commerce Kitchen; and Dave Bacon, founder of the technical staffing business BWBacon Group.
Some audience members raised their hands for the first question, but far more had already started their businesses. If you're among this crowd, but weren't present at the Thursday panel, titled “Bootstrapping without Being Strapped,” then read on for a look at the advice highlights.
“I think being an entrepreneur, if you embrace it in the truest sense, is sort of an exercise in self-esteem crisis management,” Tynan Szvetecz explained early on.
If you pay attention, you'll make yourself better every day, Tynan continued. Take a step back from your past success: Since starting a business is such a complex process, you can't rush in expecting your experience to guide you through it. “It's full of an endless array of complexities that are just impossible to predict or know upfront.”
Know Why You're Doing What You're Doing
This comes from Mike, who's on the other side of the investing table: When he's considering a company, he's more concerned with the people behind it. Why are they entrepreneurs? What will they get out of it? Founders need to consider their responses to these questions early on.
“The passion that people have for the technology or business: That shines through,” Mike sums up. It's a point that relates to another piece of advice he had to share: Know the type of company you're trying to build. Most of the founders that Mike meets with in the earliest stages do not. So how can you tell? From Mike:
“Not to oversimplify it, but I think there are roughly three types of businesses that you can form. One we would call a headquarter company, meaning that you are building a business for the long term. You don't see an exit.”
The second type, venture-backed, is relatively rare. The third, which “has emerged post-recession,” is building technologies that are integral to other products. Mike works with all… but needs to know that the founder knows which kind they're running.
Lean on Trusted, Candid Advisers
With a trustworthy group of like-minded business people, you'll have a network to support you. The knowledge that you can rely on will help you in a hundred different ways — few of which you would even be able to anticipate otherwise. Tynan offers an example:
“I joined an organization called Vistage about three and a half years ago. It's a peer advisory network, it's all confidential, but you have other executives or founders that are in very different spaces than you are, processing issues very candidly. It's a place where you can go and take your medicine. […] You can have a very honest conversation about the realities of what you're going through as an entrepreneur.”
Explore Your Options
One common thread: Every startup will have to find it's own path. Dave mentioned a friend with a crowdsourcing application, while Mike stresses a focus on the specifics behind crowdfunding, saying he can “name nine other companies you've never heard of that failed miserably” at the same thing.
Tynan also notes that, crowdfunded or not, you don't have to give up any equity in the process of building your company: “What's right for you is not going to be right for anyone else. I don't regret anything about deciding to keep our company bootstrapped. It's been completely in our control.” Of course, that could all change for the next startup.
You can check out the entire panel at Tech.co's Facebook page for more info on the conventional and unconventional stages and types of funding, and which option might be right for you specifically.