Understanding bootstrapping is important. It’s absolutely true that not every company is suitable for venture capital funding - and that doesn’t make them bad companies! They’re just different.

Similarly, not every company is suitable for bootstrapping. In particular, unless you happen to have a lot of cash to sit on, consumer networks don’t work as bootstrapped entities. For example, I don’t believe Twitter could never have been bootstrapped (and it arguably was only possible with the strategy they took because Evan Williams was able to fund it). Because networks depend on distribution, and because paywalls hamper growth, it needed to be free for a long time before it could attract enough advertising to support it.

Again, those networks don’t necessarily need to be venture funded: Tumblr was supported by a consultancy business for a while. But the stockpile of growth cash, and the ability to give your venture undivided focus, certainly help.

On the other hand, enterprise businesses and ticketed ventures like conferences are much easier to fund through actual revenue. B2B services and events inherently have a sticker price, through which you can judge the effectiveness of your business. Paths to profitability are clearer. Perhaps because of this, fewer social startups are finding funding, and enterprise ventures are becoming more in vogue. (The challenge, of course, is that many of these are aiming at other startups as their target market: something that will not end well in a significant funding downturn.)

Writer: of code, fiction, and strategy. Trying to work for social good.

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