How do you build a startup with no venture capital? Slowly – but you’ll end up with a sustainable business you can call your own.
The stereotypical startup begins with young entrepreneurs fresh out of Harvard with a bright idea for a disruptive innovation, and ends when they go public after a few years’ rapid growth enabled by selling off big chunks to investors. But there are downsides to this approach, writes Farhad Manjoo for The New York Times. You run up huge debts and end up owning little of the company. Yet there is another way.
1) Live within your means. Jason Fried, co-founder of software company Basecamp, says: “One of the problems with raising money is it teaches you bad habits from the start.” Startups fuelled by venture capital embark on unsustainable growth, forget about earning money, and don’t learn how to weather tough times. The tech economy is littered with companies that raised too much money – and suffered for it.