I’d spent many months searching before I finally reached the end of my rope. Finding an investor seemed to be an insurmountable feat. I wasn’t sure what to do, so I turned to my mentor for help. I told him all about the challenges of finding investors, which he well understood because he’d been there many times himself. He shared with me a perspective that I’d not yet considered.

He said, “First thing you have to understand is that maximizing return on money is the business of investors. Their mission is to put funds into investments that will yield the best possible return. To invest wisely requires time and due diligence on their part. Losing money could mean they’d have to shut down their business.”

I replied, “I understand that point, but without the money, I’m not sure how to move forward.” After listening contently, he shared with me an analogy. He said, “Imagine you have a wall between you and your destiny. With $50,000.00, you can break through the wall and make your destiny in six months. Without the funds, you’ll have to climb the wall, which could take the better part of three years.”

He continued, “You can possibly spend a year looking for an investor, only to come up empty handed and still have to spend three years climbing the wall. It’s a harsh reality, but it’s the truth. The best thing you can do at this time is to start climbing. If you obtain an investor along the way, you can adjust at that time. If you don’t find an investor, at least you won’t be stagnant.”

“Look on the bright side!”, he continued. If you’re able to succeed without an investor, you won’t have to spend money on debt servicing or have lifetime partner who may not share your vision. Sure! It will likely take longer to reach your destiny, but the upsides to bootstrapping are considerable.”

I left his office with a new perspective. I shared his counsel with my wife and we began doing what we could to get the business off the ground. We weren’t able to implement all of the resources up front as we’d hoped, but it was a start. I got a job while my wife worked on building certain aspects of the business. Whenever I found time outside of work, I worked on the business. Money was tight, but we were making consistent progress.

Perhaps the delay was a blessing in disguise. During the time we spent climbing the wall, we came up with ideas better than those originally proposed, which ultimately saved us time and money. It wasn’t an easy process, but as we moved towards our goal, we realized the benefit of bootstrapping.

I’m sharing this story with you, because I know how challenging it can be to raise capital from outside investors. I’ve seen entrepreneurs throw away good ideas because they weren’t able to obtain funding. I’ve also seen entrepreneurs obtain funding and blow through it as quickly as water moves through a strainer.

Raising capital can feel like a business venture within itself. Once the funding is obtained, you have to manage it wisely. If you spend it quickly trying to figure things out, such as will the business model work, you’ll soon have to return to your investors for more, which means they will likely take more of your company, take over your company or refuse to invest more. Neither scenario is desirable.

Bootstrapping allows you time to work through the kinks. When you have very little capital, you’re forced to be more strategic in your spending. You learn to be more creative. You find cost effective ways to conduct your business. While these times can be challenging, they can be of untold value.

Do what you can. Learn as much as you can. Go as far as you can. If you obtain capital, you can expedite the process. If you don’t get funding, you’re not paralyzed. You may not currently have what you want, but you may have exactly what you need to get started.

Written by: Eric L. Lipsey

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