Bootstrap Rules in Silicon Alley: Tech Startups Unite!
By DONNA BOGATIN • May 23rd, 2008 • Category: STARTUP PITCHESAs a former investment banker, I have bootstrapped the startup of new, cross-border M & A divisions for both a large, multinational banking institution and a small, privately-held private equity boutique.
Now, as Founder & CEO of my newly launched StartupAlpha.com–an online, offline technology entrepreneurship hub fueling the development of tech startups–I help bootstrapping entrepreneurs bootstrap for their own independent financial success.
37 Signals also appreciates the wisdom of self-propelled entrepreneurial ventures. When the company announced an investment by Jeff Bezos, Jason Fried affirmed his goal of “building 37 Signals into one of the great companies of the next 20 years.“
Today’s Web 2.0 venture capital environment, however, is unfriendly to the development of long-term, sustainable, stand alone technology enterprises based upon revenue generating, real-world business models, preferring instead to engineer quick flips, as the Y Combinator and Union Square Ventures models suggest. 37 Signals’s Fried on how David Feinleib at Mohr Davidow Ventures “fails” in his startup advice:
We encourage new companies to stay as far away from venture funding as they can. VC’s encourage you to spend! And since software is virtually free, and hardware is dirt cheap these days, and you only need a couple people to get your company and product going, the only place to spend your money is on sales and marketing. And spend you do, cause there’s nothing easier in this world than spending other people’s money.
Fried is in particular disagreement with Feinleib’s typical failure is a startup statistical given VC perspective.
David Feinleib: “VC’s play a high-risk game. We have to identify opportunity and risk and then accept that a certain amount of that risk will result in failure… It’s not just how fast you run the race that matters. It’s how fast the race is run. When it comes to startups, speed wins.”
Jason Fried: “That’s just ridiculous.”
Indeed. I also second Fried’s call to “big plans” arms for all startups. While Web 2.0 VCs hail a fail early and often hacker call to arms, entrepreneurs, and our nation, would be better served by a startup culture seeking to promote the technology business, not the business of financial engineering.
A finalist in last week’s DFJ East Coast Venture Challenge, held at Columbia University, laid out his five-year plan for the idea he sought funding for: Sellout for $20 million because he is too young to get stuck in a long-term gig!
Truly committed Silicon Alley technology entrepreneurs will be joining me June 3, in the heart of the Big Apple, for a Bootstrap Strategy Workshop: “How to Launch Your Silicon Alley Startup for $198!”
TECH STARTUPS UNITE: RSVP HERE BOOTSTRAPPERS!
ALSO: DO YOU HAVE AN ONLINE STARTUP, OR AN IDEA FOR ONE? PITCH YOUR VENTURE HERE FREE AT THE STARTUPAPLPHA.COM FREE PITCH NETWORK!
PLUS: Join StartupAlpha.com June 3 for a FREE Bootstrap Strategy Workshop: HOW TO LAUNCH YOUR TECH STARTUP FOR $198!
DONNA BOGATIN is the Founder & CEO of STARTUP ALPHA
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