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So many people start a business with their own money. Personally I feel that is the best way to start a business because it allows freedom from interest payments and freedom from lenders. In your opinion whe is it not a good idea to bootstrap finance?
Agree with this. Starting with your own money gives you more freedom and one less worry to think about. People I know usually start with their own money and then move on to borrow money once they have established their base and are ready to expand.
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Kate
Bootstrapping is always the way to go where possible.
I've worked for a lot of tech startups and when they are venture/angel funded, they tend to feel pressured to "make things happen". When I startup my company, I don't want any pressure; I want to do things my way.
Like Kate23 and phanio suggested, after my company makes it into the growth phase (cross my fingers) then I would be willing to seek financing from other sources. I wouldn't feel pressured as I have already proven my methods work. :-)
My 2 cents. :-)
Bootstrapping is always preferable... if possible.
Unfortunately, one of the most common causes of failure in new business ventures is a lack of capital.
You need to be very realistic if bootstrapping a new venture will allow you to survive through the startup phase and into a period of growth.
Many estimate that you should have capital equal to about three months of expenses before starting a new venture. I personally believe this is not enough.
When starting a new business, your focus will be drawn in many different directions, most of which you won't be able to anticipate before you begin. Expenses are sure to exceed your early expectations. Dealing with not having enough funds to run your business makes success a long-shot.
If you run out of personal funds and are depending on your customers exclusively to fund your business, the additional pressure you'll feel and ultimately place on your customers can be a killer to your new venture.
Using your own funds (whether it is a bank loan, credit card, or simply cash) enables you to keep the lions share of the equity. This is obviously the way to go if you can afford it.
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