the drift

drift image

Bootstraps or Golden Handcuffs?

Acorns
March 3, 2023

The age old startup debate

When starting a new venture, one of the most important decisions you'll need to make is how to fund it. There are two main options: bootstrapping (funding through revenue & self funding) and raising capital, which involves bringing in outside investors. Each approach has pros and cons, and the right choice depends on a range of factors, from the nature of your business to your personal goals and risk tolerance. In this article, we'll explore the advantages and disadvantages of each approach in more detail, so you can make an informed decision when it comes to financing your new venture.

Bootstrapping

Pros:
  • Retain full control of your business
  • Don't have to answer to outside investors
  • Don't have to worry about diluting your ownership stake or giving up equity
  • Forces you to be lean and efficient
  • Avoids the risks of taking on debt or giving up equity
  • Can be a good option for businesses that have low startup costs or generate revenue quickly

Cons:
  • Can be challenging if you don't have a lot of personal resources to draw on
  • Limits your growth potential if you don't have the funds to invest in key areas like marketing, R&D, or hiring
  • Can be risky since you're putting your own money on the line
  • Can be difficult to scale quickly without outside funding
  • May not be suitable for businesses with high startup costs or long development cycles

Raising Capital

Pros:
  • Provides the funds you need to scale your business quickly and aggressively
  • Can help you hire more employees, expand your product line, or invest in marketing to grow your customer base
  • Can bring valuable expertise and connections to your business
  • Can help you meet your growth targets more quickly than bootstrapping
  • Can help you secure deals with larger partners or customers
  • Can provide access to resources like mentorship, networking, and industry expertise

Cons:
  • Requires giving up a significant portion of ownership in the business
  • Can limit your control and decision-making power
  • Can be stressful and time-consuming to manage relationships with outside investors
  • Can be a lengthy and complex process involving due diligence, negotiations, and legal paperwork
  • Can create conflicts of interest between you and your investors
  • Can lead to pressure to achieve rapid growth and profitability, which can be difficult to sustain

Ultimately, the choice between bootstrapping and raising capital depends on various factors, including the nature of your business, your personal goals and risk tolerance, and the availability of funding sources. Both approaches have pros and cons, and it's important to carefully consider your options before deciding which way to go. Whether you choose to bootstrap or raise capital, success ultimately depends on your ability to execute your vision, deliver value to your customers, and navigate the challenges and opportunities of your market.

Why Tarpon Fishing is a Joke
Read More
Right Arrow
Klaviyo vs. The Rest
Read More
Right Arrow
You Don't Need Validation
Read More
Right Arrow
Shoshin as a Leadership Philosophy
Read More
Right Arrow
Shoshin and Collaboration
Read More
Right Arrow
The Art of Shoshin
Read More
Right Arrow
Navigating the Digital Seas with a Boutique Agency
Read More
Right Arrow
The Silver Wave: Navigating the Tides of Change in Professional Services
Read More
Right Arrow
Ego
Read More
Right Arrow
Digital Marketing Mixology
Read More
Right Arrow
Applying Occam's Razor to Digital Marketing
Read More
Right Arrow
2024's Top Digital Marketing Strategies for SMB Success
Read More
Right Arrow
Creating a Global Brand Presence for Boutique Hotels
Read More
Right Arrow
On Novelty
Read More
Right Arrow
Spill It: 5 Paid Media Tactics that Will Make Your Target Audience Drop Their Coffee
Read More
Right Arrow
Paid Media: "What Gets Measured, Gets Managed"
Read More
Right Arrow
Scaling Content Impact: The Paid Media Strategy of Giants
Read More
Right Arrow
Scalable Naming Conventions in Meta Ads: A Strategic Must-Have
Read More
Right Arrow
How to Engage a Digital Agency in Your Due Diligence Process
Read More
Right Arrow
Take a Dip in the oakpool: Fierce Independents Welcome
Read More
Right Arrow
Securing Your Facebook Business Manager Account After a Hack
Read More
Right Arrow
Our Advisory Board
Read More
Right Arrow
What Snow Crash Got Right
Read More
Right Arrow
Your Marketing Team + LLMs
Read More
Right Arrow
Why Private Equity Needs Digital Agencies
Read More
Right Arrow
Working With What You've Got
Read More
Right Arrow
The Digital Prescription for Health & Wellness
Read More
Right Arrow
#TheGreatOutdoors
Read More
Right Arrow
Adventure Awaits
Read More
Right Arrow
Advertising in Telehealth
Read More
Right Arrow
See You in London
Read More
Right Arrow
Let My People Go Surfing
Read More
Right Arrow
Dalio on Team Construction
Read More
Right Arrow
See You in Austin
Read More
Right Arrow
Partner Interview: Tim DiPietro from StartSure
Read More
Right Arrow
Advertising's David & Goliath
Read More
Right Arrow
What's a ZKP?
Read More
Right Arrow
Partner Interview: Jamie Storrs from Chenmark
Read More
Right Arrow
Up the Creek Without a Paddle
Read More
Right Arrow
Shinrin-Yoku
Read More
Right Arrow
The Fractional Workforce Revolution
Read More
Right Arrow
What are UN SDGs?
Read More
Right Arrow
What's Greenwashing?
Read More
Right Arrow
What Does "Fair Trade" Really Mean?
Read More
Right Arrow
What's a Customer Journey?
Read More
Right Arrow
Advertising in Digital Health
Read More
Right Arrow
Culture Leads Success: Time Perspective
Read More
Right Arrow
What's Digital Due Diligence?
Read More
Right Arrow
When is It Time to Hire an Agency?
Read More
Right Arrow
The Perils of Tools
Read More
Right Arrow
The Original DAOs
Read More
Right Arrow
What the Heck is "Jidoka"?
Read More
Right Arrow
Culture Leads Success: Optimism
Read More
Right Arrow
Meet the Pool: Tom Robbins
Read More
Right Arrow
Brand Messaging: Social Media
Read More
Right Arrow
Culture Leads Success: Humility
Read More
Right Arrow
What Are Ethnobotanicals?
Read More
Right Arrow
Culture Leads Success: Compassion
Read More
Right Arrow
The Acronym Dictionary
Read More
Right Arrow
Call the Plumber. GA4 is Breaking Your Pipes
Read More
Right Arrow
Meet the Pool: Remick Smothers
Read More
Right Arrow
What's "Decentralized Outsourcing"?
Read More
Right Arrow
The Role of Media in Digitally Native Businesses
Read More
Right Arrow
Organizational Structure: Outputs vs. Inputs
Read More
Right Arrow
3 Signs Your Marketing Strategy Needs an Audit
Read More
Right Arrow
See You in Edison
Read More
Right Arrow
Meet the Pool: Acorns
Read More
Right Arrow
Brainwash Yourself
Read More
Right Arrow
Cultivating Sustainable Culture
Read More
Right Arrow
Meet the Pool: Sage Yazzie
Read More
Right Arrow
What's The Difference Between SEO & SEM?
Read More
Right Arrow
7 Social Platforms To Consider
Read More
Right Arrow
Klaviyo vs. Mailchimp
Read More
Right Arrow
2022 In Review
Read More
Right Arrow
What Made Figma Worth $20B?
Read More
Right Arrow
Website Building 101: CMS Selection
Read More
Right Arrow
Yamez: 2022 Lessons & Affirmations
Read More
Right Arrow
How to Tell Your Clients You're Retiring
Read More
Right Arrow
How to Retire from Your Digital Agency
Read More
Right Arrow
Looker Data Studio vs. PowerBI
Read More
Right Arrow
Vignettes: Microdose
Read More
Right Arrow
The Private Equity Digital Marketing Due Diligence Checklist
Read More
Right Arrow
Does My Landscaping Business Need Digital Marketing?
Read More
Right Arrow
Meet the Pool: Dan Zazworsky
Read More
Right Arrow
Meet the Pool: Bryan Abarca
Read More
Right Arrow
Meet the Pool: Cydney Dean
Read More
Right Arrow
Meet the Pool: Elijah Smith
Read More
Right Arrow
Meet the Pool: Karen Yeung
Read More
Right Arrow
Giving Tuesday 2022: Elevate Youth
Read More
Right Arrow
Why We Joined 1% For The Planet
Read More
Right Arrow
Meet the Pool: Alex Ford
Read More
Right Arrow
The Austrian Defense
Read More
Right Arrow
Meet the Pool: Alex Delano
Read More
Right Arrow
Meet the Pool: Kevin DeGulis
Read More
Right Arrow
Meet the Pool: James Hamilton
Read More
Right Arrow
Nomadic Vignettes: Iceland
Read More
Right Arrow
Meet the Pool: Alan Spencer
Read More
Right Arrow
Time Off & The Steelhead Debate
Read More
Right Arrow
Welcome to The Drift
Read More
Right Arrow
International Strategy: Airbnb
Read More
Right Arrow

what's oakpool?