Bootstrapping or Outside Investment? What’s best for your business?

When it comes to startups, the harsh reality is a 50% mortality rate in the first 5 years. It’s every entrepreneur’s dream to realize his billion-dollar company and scale it to a global level.
Small and medium companies (SMEs) comprise of 80-90% of the business sector in the GCC. This begs the question of funding. Is it ok for one to bootstrap it and enjoy the liberty of being their own boss or let go of company shares to obtain funding from investors?
sanjaymodi

Source: arabianbusiness Sanjay Modi is the managing director for APAC and Middle East at Monster.com.


In the start-up dictionary, bootstrapping refers to arranging funds for ones start-up from their own personal savings e.g- Apple, Google, Microsoft and even monster.com.
With the investment sector on the rise and readily available from venture capitalists and investors, entrepreneurs rarely bootstrap their companies. In the GCC, 50% of SMEs and start-ups find funds within family, 40% receive bank loans and 10% find sources like angel investors, private firms or savings.
Therefore, although investor funding is a tempting offer, bootstrapping helps you stay disciplined and wise, focusing on needs rather than wants.
Bootstrapping allows you speed to market your idea and when you have enough funds, you can launch your project right away, whereas outside investments take a minimum of 3-6 months. Bootstrapping also allows you to be your own boss and makes you realize your vision for growth, which isn’t the case with investor funding. A bootstrapper also has the flexibility to switch plans or modify them and move in specific directions to scale his/her business.
Thanks to the Internet, content is readily available, and budding entrepreneurs can use this content to rectify mistakes and ensure their business ideas are a success.
in this day and age, it is better to bootstrap your business and experience the struggle of converting your big idea into a successful business.
Understanding the risk-to-reward ratio and adapting to changing environments is the sign of a true entrepreneur.

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