Today I had the opportunity to meet with an up-and-coming Atlanta entrepreneur, “Stephanie,” who has a growing company that she’s bootstrapped for the last three years. She recently participated in an Atlanta start-up competition and did well. Because of that exposure, local venture capitalists have shown interest in her company. Stephanie is currently evaluating if venture capital is the right path for her. It took many years, but I eventually bootstrapped CCAW to eight-figure revenues. Because of my experience, a mutual acquaintance asked me to chat with Stephanie.

I always like to start these conversations by learning about the entrepreneur’s background, business model, technology, and vision for the company. Here are some things I learned about Stephanie’s situation:‍

• ‍Solo founder – There is no cofounder or team member at her level intellectually.‍
• Scalable – Her business model is scalable—others in the market have proved it.‍
• Unique advantage – Stephanie has lived and breathed two unrelated industries for years. She’s uniquely positioned to see how linking the two can create value for customers. Others don’t realize this yet.‍
• Competition – Her business model isn’t new, but her implementation of it is unique. Highlighting this difference is critical to achieving healthy margins.

Stephanie has clarity about the destination she’s aiming for because the competition required her to pitch her destination to others. Now she has to figure out how to reach the destination quickly. She has ambitious goals, which will require a sharp team and a variety of resources. These things don’t come cheap.

In the correct situation, venture capital can help accelerate growth. Investors will also provide experience gained from prior portfolio companies, access to relationships, and accountability via a board of directors. Unfortunately, venture capitalists typically invest only when companies have the potential for outsized returns.

Everyone has to figure out what path is right for them, so my goal wasn’t to tell Stephanie what to do. Instead, I shared my bootstrapping experience—the good, the bad, and the ugly. I described the lessons I learned and the things I would do differently if I had it to do over (hindsight is 20/20).

Takeaways:

• ‍Capital source – Venture capital isn’t for everyone, nor is bootstrapping. Consider the pros and cons of all funding sources and pick the one that’s best (none will be perfect) for your company and your situation.‍
• Partnership – To build something great (a company or anything else), it’s VERY difficult to do it by yourself. Be open to partnership (cofounder, investors, etc..). Some of a lot is better than all of nothing.‍
• Timing – You can be too early, too late, or there at just the right time. Consider timing when making decisions about your capital sources or anything else.‍
• Consistent execution – When you’re executing on a growth plan, starting and stopping on the basis of cash flow—bootstrapping—makes everything exponentially more difficult.