Use Bootstrapping with Services to Increase Your Probability of Fund Raising

Posted on Tuesday, Mar 21st 2023

Raising funding for startups in Silicon Valley is a low probability game. Fewer than 1% who try actually succeed.

Outside the Valley, the startup ecosystems are mostly immature, and the probability gets even lower.

The bar to raise seed funding is getting higher and higher. Seed investors are mostly operating as growth investors, expecting that the entrepreneur will somehow manage to bridge the gap and bring a concept to realization. In fact, what these investors really want is to invest in businesses that have traction, not just validation.

In short, they want to come to the rescue of victory.

As an entrepreneur, how do you go from concept to traction? How do you bridge the seed capital gap? What do you do if you are full of dreams, but stuck in the gap between concept and seed?

Offering a service is one of the best ways to bootstrap.

This remains a controversial point of view. Most industry observers take the position that companies get distracted if they try to bootstrap a product with a service. But from where I sit, bootstrapping products with services is a tried and true method.

In our incubation methodology, we actively encourage entrepreneurs to engage in services businesses. In particular, we encourage them to immerse themselves with customers, learn their problems, and do some services projects that not only generate cash, but also generate customer intimacy and trust. Through these kinds of dialogues, entrepreneurs diagnose real pain-points in customers, and end up building products that customers are willing to pay for.

The 1Mby1M courses are all heavily based on interview-based case studies on Innovation, Business Models, Go To Market Strategies, Validation Principles, and various other nuances of an entrepreneur’s journey. We offer extensive opportunities for entrepreneurs to learn the lessons from the trenches from successful entrepreneurs who have done it before.

Try the course Bootstrapping a Startup with Services with Sramana Mitra.

The discount also applies to all of the following courses:

Bootstrapping:

Bootstrap First, Raise Money Later with Sramana Mitra

Bootstrapping a Startup with a Paycheck with Sramana Mitra

How to Bootstrap Startups by Piggybacking with Sramana Mitra

How to Bootstrap a Startup to Exit with Sramana Mitra

How To Succeed As A Solo Entrepreneur with Sramana Mitra

How Investors Think:

VC Due Diligence Questions For Startups With Sramana Mitra

Alternatives to Unicorn Chasing Investors with Sramana Mitra

How Pre-Seed Investors Think About Startups with Sramana Mitra