Will Bootstrapping See a Resurgence?

I think it is inevitable we will "bootstrapping" become more popular. Investors are sitting on a ton of dry powder and the future is uncertain. Great businesses will have no problem getting the capital they need but new business without a proven business model or first time founders will definitely have a hard time raising capital.

Additionally, a lot of money is being pooled into AI companies so if you are starting a non-AI business it could be wise to bootstrap for a while until you get some sort of traction or PMF.

We are also seeing the rise of Solopreneurs who are not taking on capital and building cash flowing businesses from day one through leveraging their skillset and expertise.

As the economy starts to pick back up and interest rates mellow out we will probably get back to the "good ol' days" of free flow capital until something else disrupts the system.

Interest rates are up so bootstrap is back.

i bootstrapped a hw business and looking back i regret it. i thought i could raise at a better valuation later, and trusted this logic after reading about it on hackernews years ago. however what i found is that the investors i pitched once i had customers, were no longer interested because they thought the traction was too small, and they did not take into account the miniscule capital it took to get there and the impressive effort delivered. so once you have revenue that will be used as a reference. if that revenue is not astronomically large then chances are you can no longer raise and you are stuck without funding to market and sell or hire. to date i have been unable to find a solution to this problem. acquiring customers is not free. curious to hear other similar stories and potential hacks to this problem.

I think one of the under-discussed consequences of generative AI will be that a single person / small team will be able to scale much more easily than before. It's very likely that a contemporary startup team of 3 people is equivalent to 10 or 20 people from a decade ago. Considering that a substantial portion of funding is typically aimed at hiring talent, this will definitely make bootstrapping more popular.

Bootstrap was always around, and will always be around. It's just that they don't make headlines as much.

If it can't become a unicorn, it has to be bootstrapped. It's how the VC game works. There's exceptions, notably 500 Startups have said that they're happy with "my little ponies" ($10m or so) but there's very few who play in this space. Most VCs would consider it a failure and force the startup to either unicorn or die.

I'd say anything that can't hit a valuation of $1B or $10m is in very fertile grounds to be bootstrapped. They're too small to be VC backed and won't face all the suppression fire they'd get when competing with VCs. They're still acquirable; Android was angel backed and not VC backed then acquired for a ridiculously cheap price of $50m. That's enough money for most people to be happy with (including the angel investor).