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Bootstrapping in 2021 goes a long way

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The boom in venture capital fundraising that the technology startup market has enjoyed since the back half of 2020 has been eye-popping. Record sums have been disbursed around the world as more firms entered the fray to invest in startups, and the late-stage capital flowed like water.

But while the venture capital game seemed to turbocharge in recent quarters, there’s noise coming from the other side of the spectrum: bootstrapping.


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Mailchimp’s $12 billion exit to Intuit, announced mere weeks ago, helped set a high-water mark for bootstrapping, proving that it is possible to build large, valuable technology companies both without huge venture capital investment and in locations outside traditional startup hubs. Mailchimp, based in Atlanta, is just one of a host of startup companies building in the city, The Exchange recently reported.

Today’s startups have more fundraising options than ever, providing a number of pathways to scale. These include services like Pipe, which allows startups to sell future revenues in a competitive marketplace, and the myriad venture-debt players that TechCrunch has covered extensively.

For startups busy funding their growth with revenue, there’s even more good news. Earlier this year, Calendly, another Atlanta-based company, raised its first material external capital — at a valuation of just over $3 billion, showing that bootstrapping early doesn’t mean that equity capital sources are closed forever. A number of other companies have followed suit in recent months.

We’re curious if a changing capital landscape, and a startup market made more viable for bootstrapping thanks to business concepts like product-led growth, will shake up the demographics of startup founders, perhaps making their ranks a bit more diverse. Let’s talk about it.

Bootstrapping today

Go back in time to the dot-com boom, and it was normal for startups to spend early capital on physical hardware. Servers weren’t something you could just call up Amazon and rent by the minute, which meant buying your own and paying co-location fees. That took capital.

And, as has been discussed ad nauseam, it was harder to build digital companies a few decades back. There weren’t infinite APIs for companies to hook into to solve complex technical issues, and there were both fewer folks trained to build new tools and fewer potential customers.

In today’s startup market, much technical risk has been settled, often lowering building costs for startups at the same time. The well-worn riff that it’s easier than ever to start a company today could be wed to the concept that it’s perhaps cheaper, too. That should bode well for bootstrapping.

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