TrendsVC PRO 0005 – Bootstrap Funds

When major network or scale effects are in play, this model might work. These powerful forces can reduce competition and protect margins. Google, Facebook, and Uber are just a few examples. File size: 137.92 KB Format File [1 Report (PDF)]

TrendsVC PRO 0005 – Bootstrap Funds

Problem
It is difficult for founders of niche businesses to find aligned, smart advisor networks.
Venture capital funds offer capital and guidance. This comes with billions-dollar expectations.
Solution

Download immediately TrendsVC PRO 0005 – Bootstrap Funds
Bootstrap Funds are created to connect people and provide financial support.-dollar exits.
VC funds depend on one or several companies to return them in order to survive.
The assumption that most investments would fail or break even is the basis of VC funds. This is not a problem. But VC doesn’t work for most companies.
When major network or scale effects are in play, this model might work. These powerful forces can reduce competition and protect margins. Google, Facebook, and Uber are just a few examples.
Bootstrap Fonds are intended to be less extreme. They invest more post-Gain traction in niche markets.
Think Castos for podcast hosting, MakerPad for education and StaticKit for developer tools.
These aren’t billions.-Dollar rocket ships and traditional small businesses
Players
Bootstrap Funds
Earnest Capital
TinySeed
Indie.vc
Smash.vc
Portfolio Companies
MakerPad (Earnest Capital)
Yeluchi (Earnest Capital)
1 Second Everyday (Indie.vc & Earnest Capital)
Castos (TinySeed)
Nice (Indie.vc)
Hostifi (Earnest Capital)
StaticKit – TinySeed
FirstBase (Earnest Capital)
MemberSpace (Earnest Capital)
Advisors
Courtland Allen (TinySeed)
Ruben Gamez (TinySeed)
Natalie Nagele (Earnest Capital)
Asia Orangio (TinySeed)
Hiten Shah (TinySeed)
David Heinemeier Hansson (Earnest Capital & TinySeed)
Rand Fishkin (TinySeed).
Kevin McArdle (Earnest Capital)
Patrick Campbell (TinySeed).
Laura Roeder (TinySeed)
Predictions

Download immediately TrendsVC PRO 0005 – Bootstrap Funds
Advisor networks are what will save or destroy bootstrap funds. Post-There are many funding options available to traction companies. Bootstrap funds are being chosen by founders to align interests and have access to experts.
Nearly all bootstrap funds LPs (limited partners), will be managed by experienced advisors. Operators are able to invest capital. Bootstrap Funds will choose to feed the flywheel over adding deadweight.
Some companies will tap into network/scale benefits to increase their chances of obtaining VC funding. Bootstrap Funds will have the opportunity to exercise equity rights.
☁️ Opportunities
Learn Islamic Finance to create better joint earnings agreements. Particularly profit and loss sharing. Sharia law forbids interest payments. This creates an opportunity to study the history of profit sharing and its practices.
Invest in bootstrap funds
In a niche that is meaningful, start a bootstrap fund.
Haters
“Bootstrap funds?! That’s an oxymoron.”
Yes. What’s life without a little cognitive dissonance? Let’s just accept it.
“These companies have traction. They should not give up equity.”
Some founders disagree. They can find cheaper, more non-invasive options.-Avoid dilutive capital and opt instead for bootstrap money. Hint: It’s not about the capital. They are looking for help.
Links
Other funding options for SaaS Start-ups Cheat Sheet — Geoff Roberts
For investors: What is a Shared Earnings Contract and How does it compare against a SAFE. — Tyler Tringas
AMA with Tyler Tringas from Earnest Capital — Jacob Peters
Reflecting on My Failed Build of a Billion-Dollar Company — Sahil Lavingia
Why We’re Putting A Bunch of Our Savings into TinySeed — Rand Fishkin
Funding for Bootstrappers 2: What we learned — Tyler Tringas
Why Smash.vc is not vc — Travis Jamison
My Next Act: Building The First Startup Accelerator Designed for Bootstrappers — Rob Walling
Why venture capital doesn’t work for everyone — Eric Johnson

Download immediately TrendsVC PRO 0005 – Bootstrap Funds