Notes from the bootstrapper panel at TechWeek

Matt Moog

Built In Chicago, Technori and Tie Midwest got together and organized a panel of four entrepreneurs who bootstrapped their companies and built them to very significant sizes.  I thought the panel was great and started taking notes mid way through that I thought I would share.   

 

The people on the panel were 


Shawn Riegsecker, Founder and President of Centro

Arvind J. Singh, Co-Founder, President and CEO of Utopia, Inc.

Ed Scanlan, Founder and CEO of Total Attorneys

Andrew Sieja, Founder and President of kCura

Brandon Cruz, President & CTO of Norvax

 

My notes and observations

 

  • They all founded their companies with no venture money
  • All of them started as  service business and used that as a jumping off point for a product business
  • They all went through very difficult periods for multiple years where they almost ran out of cash
  • The told stories about not having enough money for flights, for payroll or hotels 
  • They all felt strongly that one of the founders must REALLY know how to sell
  • One of their key motivations for starting their business is they did not want to work for someone else.
  • When they started their business they did not have a master plan.  All of them succeeded by being opportunistic and listening to their customers. 
  • You have to really believe in yourself if you want to be an entrepreneur
  • One of the greatest advantages to bootstrapping a company is flexibility.  You can change course without having to convince your investors.  When you have less cash you are much less likely to get out in front of your skis and spend too much. Raising money can have subtle but significant pressures on the founder to make decisions that are not good for the long term health of the business. 
  • Ed told a moving and compelling story about how he survived being sued in 47 states all at once. 
  • Andrew talked about meeting a stranger pool side who helped to save his company
  • Arvind talked about having to delay payroll and how hard this communication was to his employees
  • Shawn talked about having the bank pull the line of credit when he needed it the most and convincing them to give him 60 more days. 
  • Brandon talked about having great friends who supported him through the beginning--how they nearly shut down the business but received a 30K commission check (from a side business) that kept them afloat...they now repay their friends.

This panel was great because it was real, unvarnished and straight from the horses mouth.  The message that came through loud and clear is that bootstrapping a company is hard, requires huge amounts of patience and perseverance and you should expect to be tested to your limits along the way.  

 

Thanks to all the panelists for sharing their stories. Watch the video today.

 

 

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Comments

Ola Ayeni

This is my life story also. The way to go.

Erik Severinghaus

Great notes - very much appreciated!

Nicole Yeary

Excellent info ~ There's something to be said for "almost running out of cash" that works like a switch - prospecting and closing are shorter cycles, and of course, consequently conversions are higher.

Horatiu Boeriu

One of the best panels at TechWeek. Running a bootstrapped startup, I can certainly relate to this. BUT VC's money will be needed at one point to accelerate growth

Craig Steensma

Matt- thx for all u do. Fantastic list->  Would like to stress ability to sell as it’s too often ignored. Important: Great sales people also know how to motivate clients to pay early and often (no payment, no commissio). Receivables are crit when you're boot-strapping to avoid wasting time dealing with cash-flow/credit rather than running the biz.  Options we used include: Selling my car to buy a server (did it), short-term borrowing (yep), taking no salary (check) or getting out there and selling (still my best contribution - several times over).  Smart is important... Ability to sell, critical.  

Philip Nowak

Loved this panel.  Definitely my favorite session at TechWeek.

Philippe Lavie

Bootstrapping is the way to go when launching and creating a new business.  There is a place and a time for raising funds and it comes later when the business model has been proven and clients secured.  CEO is and should always remain the Chief Sales Officer even when there is a VP sales in the organization.  CEO too often relinquish their role in rain making and it is a recipe for failure.  Thx for the summary as I was not able to attend.

Sue Kim

Thanks for this. I've heard a contrary view from that self-funding allows you to just write a check and keep funding bad decisions.  But I guess those bad decisions would get vetted right quick by hard times!

Tim Jahn

I'm a huge fan of bootstrapping, but stories like this definitely make ya think twice.  I wouldn't do it any other way though - just doesn't feel right if you're not earning every penny.

Stephanie Burke

Thanks for sharing these notes Matt - sounds like it was a discussion with many great insights and solid advice.  Sorry I couldn't be there, but I hope there are more events on the topic of bootstrapping sucesses - - we cash-light entrepreneurs need all the motivation and help possible!

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