One term related to entrepreneurism and start-up companies that has come back into vogue during this recession is "bootstrapping," the art and science of starting a business without traditional sources of venture financing such as bank loans or one of the many forms of venture capital.
There are three traditional sources of capital for bootstrapped companies:
- Cash generated by the company itself. For many companies whose product is intellectual property, the founders simply do without a paycheck until their clients get - and pay - their first set of invoices. And since many of these companies open their doors with a handful of clients, that wait isn't very long.
- Other bootstrappers raid their savings accounts for start-up capital. This can include tapping bank accounts, getting loans against retirement funds, even running up credit cards...until the cash flow from the business becomes self-supporting (and, hopefully, more).
- Finally, the category called "love capital" by many industry observers and pundits: money from friends and family who believe in what you're doing.
Regardless of the source, bootstrap capital is almost always less than optimal. Hence, the need to find ways to manage and grow the business that don't involve consultants and outsourced services.
Fortunately, there's a wealth of support for self-funded start-ups, including an organization dedicated exclusively to bootstrapping. The International Bootstrapping Association (IBA) is a peer-driven organization with local chapters, monthly meetings, and a "share, don't sell" approach to membership. The IBA encourages members to both learn and teach, to help others avoid traps and accelerate growth effectively.
There are two local IBA chapters in Central Ohio, one located at Tech Columbus (near OSU), and one in the Dublin Entrepreneurial Center. Both have monthly meetings and each meeting focuses on one of the 12 Disciplines of Bootstrapping. The January Discipline is Technology - the effective use of digital tools to boost customer relationships, improve personal productivity, enable group collaboration and leverage social media.
The TechColumbus meeting is on Wednesday, January 13, and the Dublin group meeting is Thursday, January 14; both meetings are in the evening. For more information, or to sign up, visit the IBA Website or TechColumbus Site (TechColumbus supports both local Bootstrapping groups).