Verbose talk about funding in the last week. Gary Vaynerchuk said we are at a unique time: nobody has money, the playing field is level. In a panel on ‘The Startup Climate‘ at the AZ Entrepreneurship Conference I made a comment about being more scared of an out of work hacker than a larger established company in today’s startup world. The word is that most VC’s are not doing any deals until mid January, at the earliest.
Looking at a data set of 1,018 companies, Mr. Gera determined that not a single entrepreneur received venture capital funding by submitting a business plan â€œover the transom.â€ By contrast, about 5 percent of entrepreneurs who knew the venture capitalist or gained a personal introduction received funding.
This is from the original era of the dot com, where valuations were astronomical and funding cycles resembled more of a river than the dripping faucet of today.
With worldwide concerns over our economy, funding suddenly becomes very tricky. Companies with high A rounds are learning to pinch every penny. Companies that didn’t quite raise are getting creative.
I have never received funding. I much prefer bootstrapping. Plural marriage isn’t for me (marriage to your company and your investor). My style of funding a startup is to save up, live frugally, and make every dollar count.
Others are lucky (or unlucky enough) to be funded by their Visa, MasterCard or AMEX. This is by far the most common funding style I hear of.
Even with all the hype of Angel Funding and VC’s.
I’m in Athens, Greece this week (Startup Weekend and some exploring) and the topic is hot again. Athens is different though, you need 30k Euros to start a c-corp in the city. In Colorado, it costs less than $50.
Today is a bootstrappers paradise.
As Gary said, we are at a really unique time.