Will once-bootstrapped startups turn to venture during a watershed moment?
Bootstrapped startups, or companies that use their own revenue or existing cash flow to fund growth instead of relying on external capital sources, sit in a very separate box than venture-backed startups. By nature of asset class, bootstrapped startups prioritize revenue to keep alive, while venture-backed startups prioritize growth to keep investor buy-in for future runway needs. Bootstrapped companies follow less of an exponential growth curve, while venture-backed companies need to be an outlier.
Enter a downturn, and both sides get a tad more interesting. The built-in business discipline of bootstrapped startups may feel especially downturn-proof as the overfunded companies announce rounds of layoffs. As venture starts to be more interested in the stable fundamentals of the startup bunch, is it the bootstrapper’s time to swing big?