One of the discussions we have a lot in Atlanta these days is whether startups should bootstrap or raise outside money. Whether you’re talking angel money or VC money, one reason I believe it’s worth bringing on an investor is that founders need the mental freedom to operate with (less) fear than if bootstrapping.
Too often when bootstrapping (and I speak from close personal experience on this), you live with and focus too much on the fears about “what if this doesn’t work” … what if you don’t close the next account, you miss a mortgage or rent payment, you don’t make payroll, they take your house, your family will disown you!? How can you make a clear, effective, and confident sales presentation to that Fortune 500 prospect when you’re worried about your house? While a hefty appreciation for the value of fear is good, too much fear can be paralyzing.
Entrepreneurs in startup phase need confidence. You’ve got to keep moving. Don’t stop. You need to go after each deal as if you didn’t really need it and you know there are 10 more after that one if you don’t close it.
As a startup founder, you’ve already met your quota of irrational thinking by starting this company in the first place. Once you’re on the train, it’s time to stay focused, confident, and smart. Smart means rational. Fear challenges rational thinking. Sometimes a little bit of money, and knowing that someone has your back and you’ve got enough money to keep your kids from going hungry is the spark of confidence that will get you to the next level.